By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- Inflation data and retail sales will be the key economic releases this week. The Producer Price Index and Consumer Price Index (CPI) will be released Tuesday and Wednesday, respectively. CPI is expected up 0.4% from the previous month with a year-over-year change of 3.4%, while core CPI is expected up 3.6% versus a year ago. CPI has been up for three consecutive months, which has impacted both U.S. Federal Reserve (Fed) expectations and consumer sentiment. A fourth consecutive stronger-than-expected number could very well take the prospects of Fed easing this year completely off the table. Retail sales is forecast up a muted 0.4% month over month, raising some concerns over stagflation.
- Twelve different Fed speakers will be on the tape this week, including Chairman Powell on Tuesday. Expect the various Fed officials to continue to talk tough on inflation and stress data dependency with a focus on prices in terms of Fed policy.
- Earnings season is almost done, with over 90% of the S&P 500 members already having reported. Earnings have been better than expected, but there are a couple of bellwether stocks to watch this week, including Home Depot, Walmart and Cisco.
Three Things to Know
- Coffee has jumped 28% since March. This month, the Bureau of Labor Statistics is removing coffee prices from the CPI report. (Source: @julie_wade)
- Going back 70 years, $1,000 invested in the U.S. stock market when a Republican is president would be worth $27,400 today, and $1,000 invested when a Democrat is president would be worth $61,800. But that $1,000 would be worth $1.7 million today for those who put politics aside and stayed invested regardless of who is in the White House. (Source: Bespoke)
- The Northern Hemisphere is going into what could be another unusually hot summer, according to forecasters, as global temperatures continue breaking records. The European Union’s Copernicus Climate Change Service said last month’s temperatures globally were 1.58C (2.8F) above historical averages and marked the hottest April on record. (Source: Bloomberg)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.