The final week of June marks the end of the first half and second quarter of 2022. Nonetheless, numerous economic reports like the Federal Reserve consumer prices measure are alarming. The low BBBY (Bed Bath & Beyond), MU (Micron Technology), JEF (Jefferies), and NKE (Nike) earnings are also daunting. Luckily, the S&P 500 gained over 6% and rose by 3% by midweek.
This increase signals S&P 500 first weekly upsurge since May and the second-best week in 2022. However, the benchmark index is still on pace after recording the worst opening in six months since 1970. The S&P 500 companies lost about 15% or more since 1932 in the first six months. What’s more, the benchmark also dropped by about 18% by 24th June.
Analysts have lowered S&P 500 companies' price tags over the past few months but settled on a consensus bottom-up price tag for the 5,000 indexes & below since August 2021. Further reports showcase that by end-June the 4,987.28 estimate remains 31.4% beyond the 3,795.73 closing price. Nonetheless, specialists expect the price index to increase by over 30% in 12 months.
J.P. Morgan analysis indicates that the US equities might rise by almost 7% in a few weeks since investors seek to rebalance portfolios following the end of the first half and second quarter of the year. Hence, traders are closely monitoring the PCE (personal consumption expenditures) data and the economic calendar this week.
The Economic Analysis Bureau will release the monthly PCE deflator on 30th June to give traders its latest US inflation view while the Fed raises its key benchmark rate to cut price increase. Bloomberg surveyed experts who expect the PCE to increase by 0.7% unlike the 0.2% increase in the previous month. On the other hand, the PCE deflator may rise from 6.3% to 6.4% on a year-over-year basis.
The PCE core index that strips out energy and food cost retains the prior print. Analysts are also predicting a 5.1% increase in the PCE core index. These predictions are imminent as the US central bank fights a more complex inflation rate. In any case, more strategists and economists on Wall Street suggest that the Federal Reserve might not control prices without rendering the economy into recession.
Investors are keen on any changes on the economic calendar with a strict follow-up on durable goods figures, housing, and manufacturing products. The third and final first-quarter GDP read is also a vital aspect to check. Other reports like Micron Technology, Jefferies, Bed Bath & Beyond, and Nike are also crucial to monitor.
Conclusion
The DOW Jones industrial average, core PCE inflation, oil prices, Richmond fed manufacturing index and the federal reserve's preferred measure are the vital aspects to monitor moving forward. Several key economic reports on the core PCE index, FHFA housing pricing index, and Yahoo finance interest rates will play a vital role in the stock trading week ahead.
