SPY Chart done on hourly timeframe. One of the most eventful weeks of the quarter is ahead for the markets this week. The Federal Reserve will be holding their two-day policy meeting where they’ll give an update their monetary policy outlook and decide on interest rates. The Feds left rates unchanged in their last meeting as inflation numbers cooled down, but some sources are reporting a 90% chance of a rate hike this week, we’ll find out the answer Wednesday. Apart from FOMC, markets are preparing for earnings from many large cap companies such as Meta, Google, Microsoft, Coca-Cola, Boeing, McDonald’s…etc. Last week’s earnings from Tesla and Netflix drove markets down despite both companies mostly meeting expectations. Many tech...
SPY Chart done on hourly timeframe. Markets charged higher last week after multiple economic and earnings reports came in better than expected, boosting investor confidence. The latest CPI and PPI reports showed inflation is now down to the 3% mark, a significant MoM improvement and closer to The Fed’s target rate of 2%. U.S. consumer sentiment also jumped close to a two year high according to Friday’s Consumer Confidence Index. So good news all around last week for the market, but this week we’re getting deeper into earnings season, companies like Tesla, Netflix, United Airlines, and much more will be reporting their numbers. Along with critical earnings, the market is also expecting The U.S. Census Bureau to issue retail sales...
SPY Chart done on hourly timeframe. Earnings season kicks off this week with companies from various sectors reporting their last quarter performance. Financial institutions will be the first to report their earnings along with a few names in travel like Delta, and consumer defensive companies like PepsiCo. The various companies reporting this week will give us an idea of where consumers are actively spent their money last quarter, potentially foreshadowing what we could expect from other companies in those same industries when their earnings are released. Many stocks outpaced expectations last quarter, their earnings will show if valuations match their performance. If earnings aren’t enough action for you, inflation data will surely bring some movement. The CPI...
SPY Chart done on hourly timeframe. Stocks drifted lower last week as the latest comments from Federal Reserve members spooked traders, but the pull back was a much needed one. Many stocks are moving at overbought levels that need a “cool down” period before potentially rallying higher. As stocks pulled back, we noticed capital rotation into the crypto space and crypto related stocks, a correlation we haven’t seen in a while. Money flowing into crypto is a good sign that investors are gaining confidence in high risk markets again, so even if it works inversely to stocks in the short term, it will benefit financial markets generally in the long term. Economic reports to watch: Next week’s economic data...
SPY Chart done on hourly timeframe. We have a shortened trading week ahead as markets will be closed in recognition of Juneteenth on Monday. Historically we’ve seen markets trade with lower volume after a three day weekend so the week may start off with a consolidation session as everyone gets back into rhythm. Markets are awaiting May’s housing data and the PMI reading this week, but the main event is Powell’s semiannual monetary policy testimony before congress. Powell’s testimonies and addresses usually create increased volatility in the market, we’ll be watching the VIX index to monitor volatility activity. Increased volatility can inflate option pricing, which is something to note for short term option traders. Technical analysis: Many names and indexes...
