You might have heard that there is some important economic data out this week. If so, you heard right. Tuesday features the April Producer Price Index and Wednesday features the April Consumer Price Index and Retail Sales reports.
With those reports, we’ll learn more about inflation trends and consumer spending activity. The same can be said for the New York Fed’s 1-year consumer inflation expectations report being released today at 11:00 a.m. ET, as well as the earnings reports due out this week from the likes of Home Depot (HD) and Walmart (WMT).
All of that, in turn, will fold into what the market thinks it can expect from the Fed in terms of future rate cuts.
This will be an important week that will determine if the S&P 500 and Nasdaq Composite break out to new highs or move back into retreat mode. Last week was a week of forward progress, albeit on light volume that was presumably an acknowledgment of the importance of this week.
That is, market participants didn’t show a heightened degree of conviction, cognizant that this week was looming as the more meaningful week in terms of producing trend-changing catalysts.
The trend this morning favors some upside action at the start.
Currently, the S&P 500 futures are up 14 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 71 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 84 points and are trading 0.2% above fair value.
Those indications translate into modest gains. They are being underpinned by some relative strength in select mega-cap stocks like Apple (AAPL), Microsoft (MSFT), and NVIDIA (NVDA), the latter of which saw Jefferies raise its price target to $1200 from $780.
In general, modest price moves are the norm for today’s pre-market action. Not the case for GameStop (GME), however. It is up 38% reportedly because “Roaring Kitty” made his first post on X in three years with a picture — no words — that some believe speaks volumes about renewed interest in this stock.
Ben Graham would probably have a few words to say about that, one of which would presumably be… sigh. Anyway, there is some speculative flair in this morning’s action that is helping to prop things up at the start of this meaningful week.
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Originally Posted May 13, 2024 – Ready for a meaningful week
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