The S&P climbs into bull market territory, with Fed in focus next week
Last week was another winning week for the stock market, marked by rally that went beyond the big-tech players. The S&P 500 index closed up over 20% from its 2022 October low, indicating a return of the bull market. This week, investors should be looking out for several data releases that are expected to help guide central banks’ upcoming interest-rate decisions.
On Tuesday and Wednesday, we will have updates on the state of inflation in the U.S. with the release of the consumer price index (CPI) and producer price index (PPI) respectively. The Federal Reserve will also start its two-day June meeting on Tuesday, with investors widely expecting for a pause in interest-rate hikes. However, this could change depending on the CPI and PPI data. The market currently expects the bank to increase its benchmark rate in July, while investors expect the Fed’s commentary to remain somewhat hawkish, with guidance for future rate raises down the line.
The CNBC Investing Club with Jim Cramer will hold its monthly meeting on Wednesday. Members are invited to ask questions. On Thursday, we will get another look at the state of U.S. manufacturing when the Federal Reserve releases its industrial production and capacity report for the month of May. At the same time, the government will release its monthly report on retail sales for May.
Looking back, factory orders for April and the May ISM services purchasing managers index both came in below expectations last week. Initial jobless claims also increased by 28,000 for the week ending June 3, to 261,000, well above the 235,000 expected by the market.
FAQs:
What is the S&P 500?
The S&P 500 is a stock market index that tracks the top 500 publicly traded companies in the U.S.
What is a bull market?
A bull market is a financial market where prices are rising, and investor confidence is high.
What is the CPI and PPI?
The CPI and PPI are two important inflation indicators. The Consumer Price Index (CPI) measures the change in the price of a basket of goods and services purchased by consumers, while the Producer Price Index (PPI) measures changes in the price of goods used in production.
What is the Federal Reserve?
The Federal Reserve is the central bank of the United States, responsible for implementing monetary policy and regulating banks. Its key functions include maintaining price stability, controlling inflation, and promoting full employment.
What is the CNBC Investing Club with Jim Cramer?
The CNBC Investing Club with Jim Cramer is a membership program that gives members access to Jim Cramer’s investment insights and recommendations. Members receive trade alerts before Jim makes a trade in his charitable trust’s portfolio and can also attend monthly meetings to ask questions.
Next week, all eyes on Fed as S&P enters bull market zone
Last week was yet another win for market bulls with the rally expanding beyond the big players in the tech sector. The S&P 500 closed up over 20% from its October 2022 low, officially entering bull market territory. This week, investors will look forward to updates on U.S. inflation with the Consumer Price Index and Producer Price Index expected on Tuesday and Wednesday respectively. The Federal Reserve is set to begin its two-day June meeting on Tuesday, with expectations of a pause in interest-rate hikes. However, this could change depending on the CPI and PPI data. Regardless, investors expect the bank’s commentary to remain hawkish, signaling future rate raises. The Club’s June Monthly Meeting is scheduled for Wednesday and will welcome questions from members. On Thursday, the monthly report on retail sales for May and the Federal Reserve’s industrial production-and-capacity report for last month will provide insight into the state of the U.S. economy. Econ data to watch for this week includes Oracle’s earnings report on Monday, CPI on Tuesday, PPI and Lennar’s earnings report on Wednesday, and retail sales and industrial production reports on Thursday. Last week, factory orders for April and May ISM Services Purchasing Managers Index fell below expectations while initial jobless claims increased. Additionally, the CNBC Investing Club with Jim Cramer announced the sale of 25 shares of Advanced Micro Devices. The U.S. dollar index trades near the 103 level while gold remains around $1,970 per ounce and West Texas Intermediate crude hovers around the low $70s-per-barrel region. The yield on the 10-year Treasury is holding around 3.7%.