Inflation Insights & Market Impact
Hey team.
A shortened week is ahead of us with US markets closed on Monday.
Let’s review Friday’s session and see what’s next for the markets!
Impact Snapshot
Memorial Day, US markets closed - Monday
CB Consumer Confidence - Tuesday
Q1 GDP - Thursday
Unemployment Claims - Thursday
Core PCE Price Inflation - Friday
Market Evaluation
S&P 500 posts slight weekly gain with Nasdaq closing Friday at a fresh record high as gains in Nvidia outweighed worries that the Federal Reserve will delay interest rate cuts.
Fed’s favorite PCE inflation gauge due on Friday is expected to rise 0.2%.
That would mark the smallest advance so far this year for the measure, which provide a better snapshot of underlying inflation.
Fed Powell and his colleagues have stressed the need for more evidence that inflation is on a sustained path to their 2% goal before cutting the benchmark interest rate.
Economic data this week will be focused on Core PCE inflation, Q1 GDP, and the final batch of key earnings earnings.
Markets Breakdown
On our last Substack, our key outlook for the market was the ability for a re-test of the balance with the market filling the single prints left on Thursday’s session.
Thursday’s emotional session with the Nvidia earnings didn’t have a clear confirmation of a breakdown from the balance we’ve been ranging for over a week.
Market opens Friday and goes right towards those single prints with a return back into what is now a 8-day balance range. Read the update made here.
This was a textbook type of “look below and fail”, rejection of lower prices with the market returning back to where the value was.
We’re looking at a slow week opening with the main focus on Friday’s PCE inflation so we’ll look for the possibility of the to containing activity inside the balance.
Starting the week, Bulls will want to establish further acceptance inside value by flipping 5335 as support and target a new all time high while Bears will see a gap fill that was left on Friday’s session and begin building value to the downside.
ES
Some key references for the week:
Upside Levels: 5335/5346/5373
Downside Levels: 5307/5280/5263
That’s all we got!
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