Last week was short and turbulent, though stocks mostly ended higher than they began. At the beginning of the week, the S&P 500 (SPX), Nasdaq Composite (NDAQ), and Nasdaq-100 (NDX) posted new record highs as a surge in NVIDIA (NVDA) propelled a rally in tech stocks. The melt-up in the shares of the AI poster child even briefly propelled NVIDIA’s market capitalization above that of Microsoft (MSFT), making it the most valuable company in the world.
However, as investors returned to the markets following the Juneteenth holiday on Wednesday, the three major indexes stumbled in the last two sessions. Tech momentum reversed due to the heavy profit-taking and the corporate buyback blackouts ahead of the second-quarter earnings season. In addition, Friday marked the so-called “triple-witching” event, which usually boosts volatility significantly, with approximately $5.5 trillion of stock options, stock index futures, and stock index options expiring simultaneously.
Recent economic data has been a mixed bag, with strong PMI prints contrasting with cracks appearing in consumer financial health. This week, investors are looking ahead to the Federal Reserve’s preferred inflation gauge – the PCE report – along with consumer sentiment, inflation expectations, and other notable reports. These reports could shed some light on the state of the economy and its short-term outlook.
Four Economic Events
Here are four economic events that could affect your portfolio this week. For a full listing of additional economic events, check out the TipRanks Economic Calendar.
» Q1 2024 GDP Growth Annualized (final estimate) – Thursday, 06/27 – This report provides an updated insight into the economy’s health from the previous quarter. The second estimate, released in May, showed that in Q1 the U.S. economy has slowed to an 1.3% annualized rate down from Q4’s 3.4%, as consumer spending, exports, and government spending weakened. The final estimate is expected to confirm the previous numbers.
» May’s Core Personal Consumption Expenditures (Core PCE) – Friday, 06/28 – This report reflects the average amount of money consumers spend monthly, excluding seasonally volatile products such as food and energy. FOMC policymakers use the annual Core PCE Price Index as their primary inflation gauge. Following lower-than-expected May CPI numbers, economists, policymakers, and market participants will closely focus on the incoming report to understand whether the disinflationary trend is continuing.
» May’s Personal Income and Personal Spending – Friday, 06/28 – This report reflects the total value of personal income in the U.S., as well as the value of purchases of all types of goods and services by consumers. Since the consumer is one of the main driving forces behind economic growth, this report can provide an important indication about the overall health of the economy, which can impact the Fed’s decisions.
» June’s Michigan Consumer Sentiment Index and UoM 5-year Consumer Inflation Expectations – Friday, 06/28 – These reports portray the results of a monthly survey of consumer confidence levels and consumers’ views of long-term inflation 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.
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