Stocks rallied for another week, with the Dow Jones Industrial Average (DJIA) crossing the 40,000 mark for the first time. The stock rally received a fresh boost last week from a benign CPI report, as well as from a weaker-than-expected retail sales print. These data points ignited speculation that the economy is cooling, elevating chances for the Fed to cut rates in the next few months.
The blockbuster earnings season has also strongly added to investor enthusiasm. With over 90% of the S&P 500 companies having reported, average Q1 EPS growth stands at 7.3%, which is the second-highest rate in two years.
This week, investors’ attention will be split between the minutes from the Federal Reserve’s last policy meeting and the earnings report published by Nvidia (NVDA), the S&P 500’s main engine of growth in this rally.
The Fed’s minutes are not expected to contain many surprises, given that many of the central bank’s members have been sharing their opinions on monetary policy following the meeting. However, the minutes could spell greater clarity on the Fed’s projected rate-cut timeline and the level of consensus among the members about monetary easing.
Three Economic Events
Here are three economic events that could affect your portfolio this week. For a full listing of additional economic events, check out the TipRanks Economic Calendar.
» May’s S&P Global Manufacturing PMI (preliminary reading) – Thursday, 05/23 – This report captures business conditions in the manufacturing sector, which contributes a significant part of total GDP. The manufacturing PMI is considered an important indicator of business conditions and the overall economic climate in the U.S.
» May’s S&P Global Services PMI (preliminary reading) – Thursday, 05/23 – This report captures business conditions in the services sector; it is a crucial indicator since the services sector is responsible for over 70% of total U.S. GDP. PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions, as the direction and rate of change in the PMIs usually precede changes in the overall economy.
» May’s Michigan Consumer Sentiment Index and UoM 5-year Consumer Inflation Expectations – Friday, 5/24 – These reports portray the results of a monthly survey of consumer confidence levels in the United States. The confidence level affects consumer spending, which contributes about 70% of the U.S. GDP. The inflation expectations index is used as a component of the Fed’s Index of Inflation Expectations calculations.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.
