Weekly Market Update & SPY Technical Analysis Its a new month of markets, but nerves are high coming into the first week after Friday’s inflation data showed an uptick in month over month inflation. The Personal Consumption Expenditures Price Index (PCE) moved from 2.4% to 2.5% between January and February, a small change, but in the wrong direction. Markets have been riding the high of an interest rate cut at some point this year, but The Fed have been clear about needing to see inflation at or below 2% before loosening their policy. 2.5% is still a better number than the 9%+ we saw about a year ago, but the next few inflation reports must not continue the uptrend. Coming...
Weekly Market Update The S&P reached a new high once again last week after the second FOMC meeting of the year came to an end. As expected, The Federal Reserves left interest rates unchanged and didn’t have any “surprises” in their remarks. The Fed stated that they still need to see more economic data that points to cooling inflation before they cut rates, if they cut rates too quickly, inflation may get out of control again. This week’s PCE Index will update markets on inflation, which will be the biggest catalyst to watch for; however the report is set to be released on Friday, which is a market holiday in observance of Good Friday. The PCE Index is The Fed’s...
SPY Chart done on hourly timeframe. Nerves are high going into this week as markets second FOMC of the year. The highly anticipated meeting will update investors on where The Fed stand on fiscal and monetary policy, but the main focus will be on interest rates. Probabilities of a March rate cut at the start of 2024 were around 80%, but now that number has fallen to below 10%. Members of The Federal Reserve have made it clear that they want to see inflation closer to 2% before cutting interest rates. The last CPI report reflected an uptick in inflation to 3.2%, away from The Fed’s target and the likely reason why odds of a rate cut are so low. ...
SPY Chart done on hourly timeframe. Markets are coming back from a very eventful week that shed light on the labor market in the United States and reminded everyone where The Fed stood on interest rates. In his testimony to Congress, Federal Reserve Chairman Jerome Powell reinforced The Fed’s stance on inflation, stating once again that they’re looking for more economic data to ensure inflation stays down before lowering interest rates. Last week’s labor market data showed just how strong the U.S. employment rate is, another reason why The Fed is no rush to cut interest rates. The debate on monetary policy will soon have an answer come the FOMC later this month, but first this week’s big focus is...
SPY Chart done on hourly timeframe. Buyers crushed sellers last week as indexes once again moved to all time highs to start off the new month. Markets shrugged off an uptick in inflation per the PCE report and despite the chances of a rate cut in March being diminished, optimism is flowing in the market. Last week we also saw the latest GDP revision of Q4 2023, which came in at 3.2%, missing the 3.3% estimates, but markets remained unfazed by the small miss. This week’s attention shifts to the labor markets. U.S. payroll data is set to be released on Friday and estimates are much lower than the previous reading. The last payroll data came in at 353,000, but...
