We Take A Look At Events Ahead 👀 | $TSLA Set To Vote On Elon’s $56B Pay Package 📦| $AAPL WWDC Set For Tomorrow 🤝| The Road To A Rate Cut ✄
Last week the market closed near record highs once again as the latest jobs report showed a US labor market that is beginning to cool off but not at the pace economists would like it, which is concerning. Lets see how the indexes performed last week:
The Nasdaq Composite closed the week up about 2.3%
The S&P500 saw a slight rise of 1.3%
The Dow Jones Industrial closed the week at 0.3%
This week we have a June Federal Reserve meeting and a key inflation reading that is set to release Wednesday, with the first consumer sentiment report for June set to release Friday.
On the corporate front will start trading at its 10-to-1 stock split and will be holding its Worldwide Developers conference also happening on Monday. CEO Elon Musk’s $56B pay package is expected to be voted on Thursday. is still in a whirlwind as investors are wiating on Keith Gill still after a live stream on Friday on Youtube, that you can watch below ⬇️
The Fed’s Next Move: What to Expect from Interest Rates and Inflation 🫡
As the Federal Reserve prepares to make its latest policy decision, all eyes are on the May jobs report and the upcoming Consumer Price Index (CPI) release. The question on everyone’s mind: will interest rates stay put or take a dip?
The Jobs Report: A Boost to the Economy 🎯
Friday’s jobs report showed a stronger-than-expected addition of new jobs, fueling the narrative that the labor market is still on solid ground. This has led economists to believe that the Fed will need to see a decline in inflation before cutting interest rates. According to Wells Fargo senior economist Sarah House, “policymakers will need to see a few slower inflation reports over the summer in order to start cutting rates by the fall.”
Inflation Expectations 👀
The next update on inflation is expected on Wednesday morning with the release of the May CPI. Wall Street expects an annual gain of 3.4% for headline CPI, unchanged from April. On a “core” basis, which strips out volatile food and energy prices, inflation is expected to have risen 3.5% year over year, a slowdown from the 3.6% increase seen in April.
The Fed’s Policy Decision 🤔
The Fed’s latest policy decision is expected to keep interest rates unchanged, with the main focus shifting to the Fed’s latest Summary of Economic Projections (SEP) and commentary from Fed Chair Jerome Powell. JPMorgan chief US economist Michael Feroli expects the Fed to project a median of two interest rate cuts this year in its dot plot, down from three in March. Feroli believes Powell’s press conference will be perceived as “dovish,” expressing confidence that the economy is on the right path and that the FOMC can be patient in gaining confidence that inflation is heading toward 2%.
Markets Take the Fed’s Repricing in Stride 🤝
Despite the shift in interest rate expectations, the S&P 500 closed near a record high on Friday. New York Life Investments economist and chief market strategist Lauren Goodwin attributes this to the stronger-than-expected jobs report being good news for the economy, and markets being focused on growth. With a solid earnings backdrop expected for the rest of the year and a solid growth trajectory for the economy, markets can take the Fed’s repricing “in stride.”
