MarketBeat Minute

Equity markets tried to rebound on Thursday, but the move was weak and short-lived. The S&P 500 gained about a half percent at the session's high but closed the day with a loss of 0.35%. The move may turn into a deeper rout today following the NFP report. If it aligns with labor data released this week, it will reaffirm the idea that the FOMC will keep interest rates higher for longer. In this scenario, the FOMC is on track to cut rates in 2023, but when and why are yet to be seen. As it is, the first cuts aren't likely until later in the year. Next week starts peak earnings season, but don't get too excited yet. The reports will come out in dribbles until Friday, when reports from the big banks are due. The general expectation is that banks generate solid profits due to higher interest rates and can sustain capital returns. The question is how the consumer is holding up. If the banks reveal a weakened or weakening consumer, the sell-off in equities could gain momentum regardless of bank earnings.

Equity markets fell for the 2nd trading day in January, marking the start of what could become a significant contraction for the S&P 500. The index shows signs of topping below critical resistance with a growing consensus that January will be a hard month for mega-cap stocks. Names from Apple to Amazon are moving lower as investors shed holdings in overcrowded names to raise capital. The thought is that a rut in the first half will quickly lead to a market bottom and the next great entry point for index investors.Among the signs of impending doom are the VIX and non-cyclical safe-haven stocks like the Consumer Discretionaries. Both move higher, indicating rising fear and a high probability of stock market correction. If the market can't regain traction soon, downward momentum could build in the broader market. In this scenario, the S&P 500 could correct as much as 20% or more with or without a recession.

Equity markets kicked off the 2024 trading year on a sour note, with the S&P 500 falling about 1% at the session low. The move is partly due to a downgrade for Apple that shaved more than 4.25% off of its price. Barclays downgraded the stock to Underweight, citing concerns about hardware sales centered on the iPhone. At the same time, the VIX advanced to show a bottom and a high potential for a market reversal. The combination of weak S&P action and rising VIX suggests a top has been hit for equities that may result in a deep correction. The primary catalyst this week, aside from the turning of the year, will be the NFP report on Friday. The NFP is expected to align with the outlook for a soft landing and may get the S&P 500 back into rally mode. If not, the market is heading lower in the first month of the year, which points to a soft first half followed by a rebound in the second, just like in 2023.

It's the first trading week of the New Year, and all eyes will be on the data. The monthly labor market data is due over the week and may lead the market to a new high. Solid employment and wage gains will help clear the path to a soft landing, allowing the FOMC to start cutting rates early in the year. As it is, the market expects the first cuts by March. Earnings season begins next week with reports from the big banks. The banks will likely report robust gains driven by high interest rates; the question is what condition the consumer is in. Consumer spending is the driving force of the US economy; a shock to the spending outlook will undercut the outlook for earnings and any rally that may form in the S&P 500.

Equities advanced on Thursday, extending the week's Santa Claus Rally to about 0.75%. The rally may continue on Friday, but it looks unlikely we'll see a new all-time high on the S&P 500 until next year. As robust as the outlook is for 2024, there are concerns that earnings growth will not be as good as forecasted and that the FOMC may tip the economy into recession. Because it takes 12 months or longer for FOMC policy changes to take full effect, the impact of rate hikes in the first half of 2023 are still working their way through the system and could cause a marked contraction in activity come January. The question on every trader's mind is what will happen with the S&P 500 index on Tuesday when the new trading year starts. One risk is that enough traders will sit on the sidelines, waiting to see what happens, causing a self-fulfilling prophecy. In that scenario, downside momentum could build quickly, leading the market into a full-blown correction.

Equities advanced on Thursday, extending the week's Santa Claus Rally to about 0.75%. The rally may continue on Friday, but it looks unlikely we'll see a new all-time high on the S&P 500 until next year. As robust as the outlook is for 2024, there are concerns that earnings growth will not be as good as forecasted and that the FOMC may tip the economy into recession. Because it takes 12 months or longer for FOMC policy changes to take full effect, the impact of rate hikes in the first half of 2023 are still working their way through the system and could cause a marked contraction in activity come January. The question on every trader's mind is what will happen with the S&P 500 index on Tuesday when the new trading year starts. One risk is that enough traders will sit on the sidelines, waiting to see what happens, causing a self-fulfilling prophecy. In that scenario, downside momentum could build quickly, leading the market into a full-blown correction.

Equity markets hovered near break even on Wednesday as investors weighed the possibilities for 2024. Among them is a rally. The outlook for earnings is growth with sequential acceleration throughout the year. Another is a recession. The FOMC policy is restrictive and yet to be fully seen in the data. The odds are high that consumer spending will be weak in the first half and may lead to a recession. This sets the market up to advance, provided the Q1 reporting season is good, or to fall if it isn't. The next market-moving news for equities will come next week. The monthly jobs creation data is due and is expected to reveal persistent strength in the labor markets. In this scenario, the odds of a soft landing will grow and help to lift equities ahead of the Q1 reporting season. Calander Q1/fiscal Q4 reporting begins in two weeks with JPMorgan Chase. The bank is expected to grow revenue by 20% over last year and widen margin aided by higher interest rates.

Equity markets advanced on Tuesday in a day of light holiday week trading. The S&P 500 gained less than a percentage point but set a new two-year high and is on the way to retesting the all-time high soon. Equities will likely move higher this week in a Santa Claus Rally and could set a new all-time high before the New Year. This week's action will be characterized by low volume. Traders and investors are taking a break, waiting to see what happens with the New Year, inflation and the Fed. There are no earnings reports and few economic releases, so politics and geopolitical tensions could drive a knee-jerk reaction should news develop. Oil is vulnerable to such a move; the price of WTI hit bottom with the FOMC pivot to a less hawkish stance and could be sent sharply higher, given a catalyst.

Equity markets closed out the week with a gain, making the 8th consecutive weekly increase for the S&P 500. The hope for FOMC rate cuts early in 2024 has driven the move, and this week's PCE price index aligned with the outlook. The index came in at 3.1%, slightly cooler than expected, suggesting the Fed's soft landing is fast approaching. The question is if the economy will hit the ground running or crash through, and either scenario is unfavorable to equities. On the one hand, disinflation and deflation will lead to recession and on the other, consumer inflation remains hot for years with a risk that it will accelerate and drive the FOMC back into rate-hiking mode. Santa Claus Rally or not, the S&P 500 is approaching its next major turning point. The index may continue higher and set new highs in 2023 or be contained by resistance. The following week could be telling, but investors should not read too much into holiday-week trading. The true test of the market will come in January.

Equity markets tried to rebound from Wednesday's unexpected selloff on Thursday but failed to regain the prior days' losses. The S&P gained 1% for the day but closed well off the highs for the week. The weekly pattern suggests a rising level of fear ahead of the PCE report, due out Friday. The PCE report is expected to confirm slowing inflation but at an insufficient pace to allow the FOMC to cut interest rates soon. The S&P 500 price action shows resistance below the all-time high, a critical hurdle for the market. Given the proper catalyst, resistance at this level could lead to range-bound trading or a sharp correction. That catalyst could come soon, given the risk of inflation accelerating. Oil markets are already stabilizing after their correction, and ocean-going freight rates are through the roof on geopolitical concerns centered on the Red Sea.

Equity markets tried to rebound from Wednesday's unexpected selloff on Thursday but failed to regain the prior days' losses. The S&P gained 1% for the day but closed well off the highs for the week. The weekly pattern suggests a rising level of fear ahead of the PCE report, due out Friday. The PCE report is expected to confirm slowing inflation but at an insufficient pace to allow the FOMC to cut interest rates soon. The S&P 500 price action shows resistance below the all-time high, a critical hurdle for the market. Given the proper catalyst, resistance at this level could lead to range-bound trading or a sharp correction. That catalyst could come soon, given the risk of inflation accelerating. Oil markets are already stabilizing after their correction, and ocean-going freight rates are through the roof on geopolitical concerns centered on the Red Sea.

Equity markets reversed course on Wednesday, ending a steady string of advances with a 1.5% decline. The move was driven by fear the Fed would not cut rates early in 2024 but would hold off until mid-year or later. The latest CPI report showed inflation cooler than before but holding steady near double the FOMC 2.0% target, a level inconsistent with the idea of interest rate cuts. The November PCE Index is due on Friday and may confirm stabilizing inflation at a higher-than-normal rate, a scenario sure to keep the FOMC in a hawkish stance for the next few meetings. The S&P 500 is unlikely to move higher without a significant change in the outlook. The PCE data could do it, but it may take more than one data point to sway the Fed. This means high-interest rates and their impact on housing and consumer markets will remain in place. With the outlook for S&P 500 earnings growth in a quick retreat, it is likely the market will enter another correction in the first half of 2024 and could shed 10% to 20% before it is through.

Equity markets extended their rebound another day, lifting the S&P 500 by 0.5% on Tuesday. The move was driven by intensifying hope that the FOMC would cut interest rates soon, a hope that may take the broad market index to a new high. The index is on track to hit and exceed the all-time before the end of the year and could produce a solid Santa Claus Rally next week. The caveat for investors and traders is that the FOMC may not cut rates as quickly as hoped, and data that could alter the outlook is due this week. This week's release of November inflation data will help push the S&P into its next move, setting new all-time highs or topping out. The market expects the PCE data to show cooler inflation than last month and year and may be disappointed with the results. The CPI index showed inflation holding steady and at levels well above the Fed's target rate, which should be expected from the PCE. The takeaway is that inflation is cooling but still running hot compared to the 2.0% target rate and will keep the FOMC in a hawkish stance for the foreseeable future.

Equity markets advanced on Monday, setting the S&P 500 up for an 8th consecutive week of gains. The move took the index up about 0.75% at the session's high to set a new multi-year high just shy of the current all-time high. Because the market continues to show resilience and momentum in the face of high interest rates and inflation, it should be expected to continue higher. The question is what the market will do once the all-time high is reached. The primary market-moving event for the week is the PCE price index, due on Friday. The index is expected to confirm slowing inflation by posting the lowest pace in three years since the inflation surge began. The risk now is that inflation will cool faster than expected and lead the market to another extreme, an extreme in which disinflation and deflation lead to recession. Assuming the data is as expected, Santa Claus should come to town for the traditional Santa Claus Rally.

Equity markets advanced following as-expected inflation data and a shift in Fed policy. The Fed indicated rate cuts are likely in 2024, marking the top of the rate hiking cycle. The bad news is that inflation continues to run hot so higher-than-normal interest rates will persist for some time. Even with the 75 basis points of cuts indicated, the market will end the year with rates at 4.5% or higher and double the rate going into the COVID-19 pandemic. The S&P 500 is moving higher, and a Santa Claus Rally is likely; this week's PCE price index is a likely catalyst for the bulls. The risk is that markets remain below critical resistance at the all-time high which might cap gains for this year and next. However, if the S&P 500 can move above the all-time and sustain it through January, the odds are high that the market will continue to rally in 2024.

Equity markets were relatively unchanged on Thursday as traders digested the previous day's news. The shift in FOMC policy is promising but may not be the great news equity markets seek. While the Fed has signaled the peak of interest rates and oncoming cuts, the news is already spurring demand for homes and energy, raising the possibility inflation will accelerate again. The rate on the 10-year treasury fell to the lowest level since July during the session, indicating a significant decline in mortgage rates, while the price of oil surged more than 3.5% at the session's peak on demand hope. The S&P 500 is still in rally mode and will likely end the year higher than it is now. The caution for traders is that the index remains below the all-time high and may be unable to cross the threshold to a new all-time high without another catalyst to drive it. The next significant catalyst is the PCE price index due on December 22nd, just in time to usher in the Santa Claus Rally if it confirms cooling inflation.

Equity markets cheered the FOMC's latest policy shift but should not be sanguine. The Fed's shift is likely short-lived, given the impact of the news on oil and equity markets. The Fed signaled at least three quarter-point interest rate cuts in 2024, clearing the runway for oil and risk-on asset demand. In this environment, inflation could easily accelerate, leading the FOMC to revert to its tighter stance. The S&P 500 gained more than 1.25% at the height of the session as investors loaded up on deep-value stocks with high yields and a significant chance of outperforming bonds as interest rates fall. Capital invested in such names will continue to pay the same 4% to 6% yield as bonds indefinitely, with the added bonus of capital appreciation. The bad news is that the technical outlook for the S&P 500 continues to deteriorate. The market moved higher with a solid gain but indicators such as MACD and stochastic are overbought and diverging from the action suggesting growing weakness as the rally grinds higher.

Equity markets continue to diverge from oil prices, with the S&P 500 moving up to set another new high for the year and oil prices falling to the lowest in months. The moves were driven by an as-expected CPI report, which has equity traders hoping for the first interest rate cuts to come soon and oil markets scared higher-for-longer will impact demand and lead to recession. The takeaway is that enough uncertainty remains for either outcome to be accurate; the question now is which market has it right and what the truth will mean for the economy and stocks when it becomes known. The CPI data was as expected and confirms cooler inflation, but inflation remains hot and double the Fed's target at the core level. The data suggests inflation will continue to trend lower and lead to the coveted soft landing, but there is a risk that the FOMC will act too soon. Letting the market think that rate cuts are indeed on the way would be a catalyst to drive demand, keep inflation running hot and keep interest rates higher for longer than the market is pricing. With OPEC+ trying hard to keep oil prices higher, it won't take much to get that market into gear and underpin another surge in prices.

Equity markets advanced on Tuesday, driven by hope for cooling inflation and news from the retail sector. Private equity firms have made a joint offer to take mall-based Macy's private. The deal alleges the stock is deeply undervalued, highlighting value across the industry. Names like Kohl's and Abercrombie & Fitch also advanced on the news gaining mid to high-single digits for the day. Today's market-moving event will be the CPI index. The index is expected to reveal that core inflation is holding steady compared to the previous month, keeping the FOMC in wait-and-see mode. The risk for traders is hotter or cooler than expected data, with the FOMC meeting set for Wednesday. The committee isn't likely to alter its policy but could begin to signal the next policy shift, which would be a bullish catalyst for the market. The S&P 500 advanced 0.4% for the session setting a new high for the year; the index is still below significant resistance targets at the current all-time high.

Equity markets advanced in the preceding week but may not get much higher. The S&P 500 is facing stiff resistance near 4,610, and multiple catalysts due this week could dampen appetite for stocks. Among them are the CPI inflation data, the FOMC policy decision and the November retail sales. Because inflation is expected to run hot again, the FOMC is unlikely to alter its stance on interest rates. The retail sales figure may also be disappointing, given the impact on spending that higher prices and interest rates have. The next move for the S&P will be telling. If the market manages to move up to a new high this week, the odds of it setting a new all-time high are near certain. If not, the market will remain range-bound for the foreseeable future and a Santa Claus Rally is unlikely. In that scenario, a move to retest support near 4,550 is the least investors should worry about because a much deeper correction could be coming.

Equity markets rebounded on Thursday on hopes that labor data would be a Cinderella story. The data can not be too hot or cold or may raise fears of higher interest rates for longer or looming recession, depending on which way the wind blows. In either case, the outcome for the S&P 500 will be tepid earnings growth in 2024. The S&P 500 advanced 0.75% at the session's peak and remains within a tight range at critical resistance. Next week will be a hot one for traders. The economic calendar is filled with potentially market-moving events running from the Retail Sales figure through inflation and an FOMC policy announcement. What makes next week different from others is that the PPI and CPI will come out ahead of the FOMC decision and could drastically alter the outcome. The data is expected to cool from the previous month; the question is by how much. Enough to put the committed on track to cut rates in early 2024 or enough to cause concern that inflation is falling too fast?

Equity markets tried to rebound on Wednesday but stumbled after getting what they wanted: soft labor data. While the ADP and JOLTs figures suggest softening in the labor market and may lead the FOMC to cut rates sooner than expected, there is a downside that should be considered. Slowing labor market growth and business spending will impact GDP in 2024 and may lead the economy into recession. The odds of a soft landing have grown in recent months, but investors should not be sanguine, the Fed has been behind the curve since the beginning of the inflation crisis and is unlikely to proactively cut rates. Cutting too soon will result in accelerating inflation and higher rates for longer. The S&P 500 continues hovering at critical resistance with several potential catalysts. The first comes on Friday with the NFP report, expected to show a solid job gain of 190,000, the next is the following week and includes a double-shot of inflation news, the FOMC decisions and retail sales. The CPI and PPI will most likely confirm slowing inflation but the retail sales may also confirm weak spending and lackluster holiday season.

Equity markets continue to trend within a tight range below critical resistance. At the same time, good news continues to emerge but it is more of a sell-the-news event because the news is centered on weakening economic data. A softer than expected JOLT figures suggest a pullback in business spending and hiring that will aid a reduction in inflation. The bad news is that reduced business spending and hiring will also result in soft GDP growth and a weaker consumer. The S&P 500 is hovering at critical resistance with a catalyst due on Friday. The monthly job growth figures are expected to show sustained labor market health but may give the market what it wants: soft data and a reason for the Fed to cut rates. The risk now is that the market may indeed get what it wants and more, the recession everyone feared would happen but didn't.

Equity markets pulled back on Monday to potentially end 5 straight weeks of historic market gains. The S&P 500 rose more than 12% in that time to set a new high for the year but may not be able to move much higher. The market is still trading within a significant range, and there is little reason to think it can continue to rally. While the peak of the Fed's interest rate cycle is near, there is still much uncertainty in the 2024 outlook, and the consensus figures for earnings growth continue to decline. The latest figures for Q4 have S&P 500 EPS growth at only 3%, down nearly 1000 basis points from the peak set earlier this year. Economic data is the most visible market-moving event this week. About a dozen reports are due, with the NFP and labor data topping the list. The NFP is expected to show persistent strength in the labor market and give the FOMC little leeway with their next decisions. Consumer inflation is cooling, but tight labor market conditions are a tinder box for inflation provided a catalyst: the Fed indicating lower rates are coming is a catalyst the market is desperate to see.

Equity markets advanced last week, but the top to this rally is closer than ever. The bulk of the week's movement occurred on Friday, which is a generally bullish signal but met resistance near recent highs. The technical picture suggests the market hit the ceiling and stands to correct any day and maybe spurred to sell off this week. This week brings the latest labor market data, which is expected to align with labor market health and wage inflation. The risk for markets is oil. Oil has been a wild card in 2023, but the odds are high that the price will rise soon. OPEC's latest production moves will take some time to impact but keep the supply/demand outlook tight. In this scenario, the price of oil is unlikely to stay down long and could rebound to the top of the EIA's target range for next year. That puts the price of oil at an average of $89 per barrel in 2024 and in position to keep inflation running hot.

Equity markets continue to tread water near critical resistance. Thursday's action was driven by an as-expected read on consumer inflation that reinforces the idea the FOMC will start cutting interest rates soon. The risk is that rapidly slowing inflation will turn into receding inflation and drive the Fed to make aggressive cuts. In that scenario, the release of pent-up demand in the housing sector could send inflation back to record highs. Next week will bring another hurdle for market participants. The monthly labor data is due out and will either confirm persistent labor market strength and wage inflation or show eroding business activity. In either case, the S&P 500 earnings growth outlook will suffer and cap gains for equities. As it is, the range-bound S&P 500 is trading near critical resistance, showing a string of Spinning Tops with deteriorating indicators with a substantial risk of correction.

Equity markets tried to advance on Wednesday but could not hold the gain. The result is another day of sideways trading near recent highs in a string of sideways moves that are beginning to look like a frothy market top. Wednesday's action was driven by a hotter-than-expected revision to Q3 GDP and reinvigorated fear of higher interest rates for longer. Without a catalyst to drive it higher, the odds are high that the S&P 500 will begin to correct soon. The indicators point to an overbought market and waning momentum about to swing into negative territory. Such a move would confirm a bearish sentiment with the index trading at critical resistance and could lead sellers into the market. One potential catalyst will be released today, the PCE price index, and the next FOMC meeting is only 2 weeks away.

Equity markets wavered for the 5th consecutive trading day on Tuesday as participants waited on critical inflation data. The latest read on the PCE price index is due Thursday and will lead the market to its next move. The data is expected to cool compared to the prior month and previous year, confirming the idea the FOMC is done raising rates. The question is if the data will indicate higher rates for longer or point to the first interest rate cuts since 2020. Another cause for market concern is OPEC+. The cartel is set to meet again on Thursday and is expected to confirm additional production cuts. The cartel is working hard to keep the supply/demand imbalance tilted toward higher prices but non-OPEC production continues to rise. If the cartel is successful with its plans it could underpin inflation and keep the FOMC in a hawkish position regardless of the PCE Data.

Equity markets began the week on uncertain footing as investors look ahead to what December will bring. The S&P 500 hugged the flat line throughout the day, leaving the markets slightly lower at the session's end. The cause for concern includes the OPEC+ decision on production targets, which was delayed from last week, and the October reading of the PCE price index. OPEC+ is expected to reduce production to support oil prices, and the PCE index is expected to cool. While one new byte is expected to cap gains in equity markets, the other could spur the market to new heights. In either case, investors should not chase prices and be prepared for volatility. The question on everyone's mind is if Santa Claus will bring a rally to town this year. The Santa Claus Rally traditionally starts a week or two before the Christmas Holiday and tends to leave equity markets higher at the end of December. This is more true in election years when pre-election positioning helps to lift equities. If Santa Claus does bring a rally to town, the S&P 500 could end the year at a record high.

Equity markets advanced the week of Thanksgiving as investors gave thanks for slowing inflation. Although still hot, inflation has cooled to the point that the FOMC is expected to start cutting rates in the first half of 2024. The coming week's PCE Price Index may confirm the trend and, if so, spur the market to new highs. The risk for traders and investors is that the market will top out soon due to the declining estimates for Q4 earnings.The Q3 earnings season was better than the consensus estimate at the start of the reporting season, which aligns with the trend. The consensus for Q4 imploded during the cycle, which also aligns with trends and suggests a weak holiday quarter and earnings weakness in Q1 of 2024. In this scenario, a persistently declining outlook for earnings will weigh on the market as the quarters progress and keep the market range bound regardless of the FOMC's next move.

Equity markets advanced on Wednesday, setting a new three months ahead of the Thanksgiving Holiday. The move is partly due to a gain in Microsoft driven by the reinstatement of Sam Altman to the held of OpenAI. Shares of Microsoft moved up to set a new all-time high on the news and could head higher. The company is establishing itself as a rival to AI powerhouse NVIDIA and will likely build on the momentum gained in 2023. The S&P 500 closed with a gain near 0.5%, but the move wasn't strong. The index tests resistance at a critical level and has difficulty advancing above it. If the market doesn't commit soon, bearish traders could come back to the market. In this scenario, the index is capped at critical levels and below the all-time high, where it is likely to remain range-bound. With the holiday shopping season looking like a bust, it's unlikely the S&P 500 will set new highs soon without a change to the fundamentals. That won't come without a change in the FOMC policy stance, which isn't likely until next year.

Equity markets stumbled on Tuesday on mixed results from Lowe's and other retailers. The quarterly results were mixed with top-line weakness but margin strength to drive outperformance on the bottom line. Still, it was the guidance that sapped investors' confidence. The guidance points to a weaker-than-expected holiday quarter, but there is a caveat. The caveat is that weaker-than-expected guidance has been the theme in retail all year and offset by better-than-expected reality. If this trend continues, the holiday quarter shouldn't be too bad. Other news impacting market sentiment includes the FOMC minutes. The minutes from the last meeting gave no indication that a rate cut was near, which isn't what the market wants to hear. The market is ready for the first cuts to start soon so that the housing market can get unstuck, but it could be disappointed. Although the pace of inflation is slowing it is still high, and the FOMC needs to be sure that inflation is tamed, so higher-for-longer is still the name of the game.

Equity markets stumbled on Tuesday on mixed results from Lowe's and other retailers. The quarterly results were mixed with top-line weakness but margin strength to drive outperformance on the bottom line. Still, it was the guidance that sapped investors' confidence. The guidance points to a weaker-than-expected holiday quarter, but there is a caveat. The caveat is that weaker-than-expected guidance has been the theme in retail all year and offset by better-than-expected reality. If this trend continues, the holiday quarter shouldn't be too bad. Other news impacting market sentiment includes the FOMC minutes. The minutes from the last meeting gave no indication that a rate cut was near, which isn't what the market wants to hear. The market is ready for the first cuts to start soon so that the housing market can get unstuck, but it could be disappointed. Although the pace of inflation is slowing it is still high, and the FOMC needs to be sure that inflation is tamed, so higher-for-longer is still the name of the game.

Equity markets had a lot to give thanks for on Monday and rose 0.75%. The move took the S&P 500 to the highest level since July and is on track to continue higher. The market is at a critical resistance point that, if crossed, opens the door to a larger move. The S&P 500 could advance to the 4,800 level in this scenario before hitting its next resistance point. This week is an uncertain time for the market. The end of the Q3 earnings reporting season is at hand, and holiday trading conditions are present. This means low volume and an above-average chance for volatility. Because the biggest name reporting this week is NVIDIA, there is a good chance that markets will be volatile on Friday. NVIDIA is expected to nearly triple its revenue compared to last year and may exceed that given the demand for AI and services.

The S&P 500 advanced for the third consecutive week last week, but the rally may be over. The weekly candle is strong, but the dailies show gaps, froth, spinning tops and resistance at a critical level. This level has provided resistance multiple times and is the starting point of the sell-off, which began over the summer. Investors should expect another significant sell-off to happen soon if the market can not get above this level. This could be a quiet week for the market. The Thanksgiving Holiday will shorten the trading week by a day, and not many economic or earnings reports are due. The single report of interest is NVIDIA, which is scheduled for Tuesday night. The company is expected to grow revenue by nearly 200% and could outpace the estimates given the demand for AI. Guidance may also be good and should help lift the stock price. If not, it will be due to fears of market share loss to up-and-comers with advanced chips like Advanced Micro Devices and Microsoft.

Equity markets nearly snapped a 3-day winning streak on Thursday, with the S&P 500 rising marginally for the day. The move was sparked by fears of slowing consumer spending and the possibility of deflation and recession. In that scenario, deflating prices and slowing demand could equate to widespread job losses, stagnating GDP growth and aggressive FOMC rate cuts. While rate cuts are what the market wants, they may come at a cost that will trim significant value off the S&P 500. The S&P 500 is at another critical juncture with little more than a month left in the trading year. Next week is the Thanksgiving Holiday, and after that, December. With inflation in retreat and the FOMC in wait-and-see mode, Santa Claus may bring a rally to Wall Street. No major economic releases are due, but a few earnings reports, including NVIDIA, could amp up the market. The company's solid momentum could easily lead to outperforming the astronomical estimates. Revenue for the AI-chip leader is expected to ramp nearly 175% YOY.

Equity markets extended their gains on Wednesday following a better-than-expected Retail Sales figure and healthy reports from retailers Target and The TJX Companies. Both produced substantial bottom-line strength, although the causes were different. In the case of TJX Companies, sales traffic led to revenue growth and margin leverage, while Target leaned into discounts to reduce inventory. The takeaway is that consumers remain resilient if price-conscious and in search of bargains. The S&P 500 advanced about 0.5% at the session high, but weakness started to show; by the end of the session, the market was trading near break-even. The day's candle stick formation is a small spinning top with a visible upper shadow that reveals resistance below critical levels. Because the market is overbought at current levels and trading within an established range, it will likely sell off soon without another catalyst to drive it higher. The earnings season is all but over, and there are no major economic reports due until after the Thanksgiving Holiday so another catalyst may be hard to come by.

Equity markets advanced on Tuesday following a cooler-than-expected CPI report. The headline CPI was flat compared to the prior month, resulting in a 3.2% YOY gain, while the core figure declined to 4.0% YOY and the lowest level in 2 years. The news is on track with the idea that inflation is subsiding and the FOMC will not raise interest rates anymore, causing the S&P 500 to gap higher at the open and rise more than 2.0% at the session's high. The move suggests another attempt by the S&P 500 to cross above the 4,550 level, which could come soon. The risk for the market is retail earnings. The retailers are reporting this week, and signs of upcoming weakness are already present. The report from HD continues the trend established earlier this year in which quarterly results were better than expected, but guidance was lowered. This situation creates an unstable foundation for markets to rally and may cap gains at the critical level. With the outlook for Q4 earnings growth already receding, weak guidance from the retail sector could send the consensus figure for the broad S&P 500 below 0% and spark the next market correction.

Equity markets were flat on Monday as traders brace for a big week for stocks. Not only is the October read of the CPI due, but there is a raft of earnings reports from the retail sector and Retail Sales data on the calendar. The market expects to see weakness in consumer spending and may not be disappointed. The latest data from the NRF shows retail sales contracting for the 2nd month. Retailers slated to report earnings include Home Depot, Target, Walmart, and the TJX Companies.The S&P 500 is poised to advance, given an excuse to do so. That may come with the CPI data, which is expected to show cooling inflation compared to last year. If the figures come in cooler than expected, specifically at the core level, the market will most likely rally on renewed hope that the FOMC has reached the cycle's peak. If not, the market may be capped near recent highs and enter another correction before the end of the year.

Equity markets advanced last week despite another hawkish twist in the FOMC saga. Fed Chief Jerome Powell apparently contradicted his own comments that the peak of the rate hiking cycle was near. He says the committee is not confident it's properly positioned to bring inflation back to the 2% target. In this scenario, the Fed will need to hike rates at least 1 more time to be sure and may need to hike more than once if inflation persists at above-target levels. This week will bring a host of catalysts for the market including the CPI reading and earnings from retailers. Retailers from Home Depot to Target, Walmart, and TJX Companies are on deck and will give a deep glimpse into the state of the consumer. While spending is expected to remain solid shifts in habits favor Walmart and the off-price retailers. The real question is how the holiday season is shaping up and how much discounting it will take to drive store traffic.

Equity markets were mixed and flat early on Thursday as market momentum waned. However, the day turned into a rout for the bulls following hawkish comments from Fed chief Jerome Powell. He says the Fed is not confident that it has done enough to tame inflation, and more rate hikes may be needed. This is contrary to a recently firmed opinion that the Fed was near the cycle's peak and put a cap on equities. The S&P 500 is showing resistance near recent highs and may not be able to move much higher without another catalyst. The next big market-moving events will come next week with reports from major retailers and the CPI report. The CPI may show another cooling in inflation and provide a lift for equities; the risk is that a CPI-driven rally may quickly reverse when Target and Walmart report later in the week. Walmart has been a resilient player, gaining market share and controlling shrinkage, while Target loses share and struggles with theft.

Equity markets were mixed on Wednesday, with the S&P 500 struggling to extend its longest winning streak in 2 years. The move comes after a sharp melt-up driven by the Q3 earnings season, cooling inflation, and evidence the Fed is nearing the peak of the rate hike cycle, so a slowdown in upward momentum is expected. The caveat for investors is that the new normal is still in place and will continue to drag on corporate earnings over the coming quarters. The S&P 500 may continue to rally from here, but there is risk. The market is still below critical resistance at the 4,400 level and may have difficulty moving above it without another significant catalyst. All eyes will be on central bankers on Thursday. Central bankers from around the world will participate in a panel discussion. The topic is global financial stability and will include inflation and interest rates. The risk in this event is talk of persistent inflation and lingering interest rates, which are hurting the global economy. Signals that inflation is tamed or that rates will soon fall could lift the market.

Equity markets advanced another day on Tuesday, taking the S&P 500 up by 0.3% to set a 2-month closing high. The rally is the 2nd longest for the year and may continue higher, given solid results from retailers next week. The risk is that retailers' profits and guidance will fall short of the consensus and cap gains for the index, and there are reasons to fear. Reports are due from Walmart, Target, and Home Depot; 2 of which have struggled this year. This week's risk is Fed-related. There are a dozen speaking engagements on the calendar, including an IMF panel discussion with Jerome Powell. The discussion will surely hit on inflation and monetary policy so that it will be closely watched for clues. The latest indications are that the peak of the FOMC rate hiking cycle is near; words contrary to that outlook will harm the market. If the S&P 500 is unable to get above 4,350 by the end of the Q3 reporting period, the odds are high that another deep stock market correction will follow.

Equity markets were steady and stable on Monday following the rebound last week. The market is digesting the 6% move posted in the previous week and may move sideways for the next 2 to 3 weeks. This week will bring another onslaught of earnings reports, but nothing that should be significantly market-moving. The next big hurdle will come next week when the retailers start to report, and the latest read on the CPI is released. Another cool figure will reinforce the idea that the FOMC is at or near the peak of the rate cycle and send the S&P 500 back to its recent highs. The risk for the market now isn't that rates will keep rising but that they may stay at this level indefinitely. Labor markets remain strong, and oil demand and high prices will continue to underpin the cost of goods. Without a demand reduction, the cost of goods will remain high and keep the Fed's foot on the brakes. In this scenario, S&P 500 earnings power will continue to erode and cap upside potential in the index.

Equity markets rallied in the prior week on hopes the Fed rate hiking cycle is near the end. Remarks from Fed chief Jerome Powell alluded to the event but left the door open to additional hikes should they be required. However, the takeaway is that rates will remain high indefinitely, and the first cut may not come until late in 2024. The S&P 500 gained about 6% for the week but remains below the 2023 highs with critical resistance close. This week will be a trying time for equity traders. There is very little economic data, lots of fed speak, and another week of earnings. Earnings reports from Disney, Kellanova, and Occidental Petroleum will take the spotlight. The questions are how margins hold up and the outlook for capital returns. Disney, specifically, could shed light on when it will reinstate its dividend, which would be a significant catalyst for the stock.

Equity markets continued to rebound on Thursday following the Fed's November policy statement. Although the Fed indicated another rate hike could be necessary to tame inflation, the market cheered because the peak was near. The S&P 500 gained about 2% at the session's high and could continue to advance over the next few weeks. The risk is that inflation is not tamed, and rates will remain high indefinitely. In this scenario, the S&P 500 will be capped by a dwindling outlook for corporate earnings growth. The consensus estimates for earnings growth in 2024 are falling. The Q1 and Q2 figures are down more than 50% from recent highs and may continue to fall as the year progresses. Consumers are already pinched, and with the holiday season approaching, there is concern that spending will be less than analysts expect. The takeaway for consumers is that discounts and deals are expected to approach the pre-pandemic levels, which were highly favorable to shoppers.

Equity markets rebounded on Wednesday, bolstered by the FOMC policy decision. The FOMC held rates steady as expected and made little to no change in the statement. The most glaring change is the outlook on economic growth, which was upgraded. The committee says the economy expanded rapidly, ultimately bad news for stocks. With economic activity still robust and potentially accelerating, the odds that inflation will recede to 2% soon are dwindling. In this scenario, the FOMC may not hike rates again this cycle, but the first interest rate cut is a long way off. The S&P 500 gained over 1% on Wednesday, extending the rebound to 3 days. The caveat is that this move is a relief rally within a downtrend and below critical resistance. If the market can not extend the rally on Thursday, there is a chance the sell-off will resume. In this scenario, it doesn't matter what the Fed does now, only the impact on earnings and the outlook for S&P 500 earnings growth.

Equity markets continued to rebound on Tuesday, but investors should not read too much into the move. The S&P 500 gained less than 1% for the day and remains below critical resistance. If anything, Tuesday's gain was a relief rally within a bear market and 1 that comes with outsized risk. Today is the FOMC policy decision, and the odds are high that the committee will issue a very hawkish statement. The pace of inflation remains high despite recent slowing and will keep the Fed's foot on the economic brakes indefinitely. In the absence of a recession, the odds favor high inflation for a prolonged period due to resilient labor markets, consumer spending and oil demand. Regardless, the consensus figures for Q4 and 2024 S&P 500 earnings growth are suffering. The consensus figure for Q4 is down 50% from its peak and could fall further. Because earnings growth is a market-leading data point, it is likely the S&P 500 will continue to see downward pressure.

Equity markets began the week on an upswing, with the S&P 500 rising more than 1.5% at the session's high. The move was driven by some better-than-expected earnings reports and the hopes the FOMC will be lenient on Wednesday. The FOMC is expected to release its next policy move on Wednesday, and for that to be no change to base rates. However, the market should be ready for a hawkish statement. Inflation has cooled from its highs but remains hotter than target and will keep the Fed hawkish for the next year. This week will bring a host of earnings reports with more than 150 S&P 500 companies slated to report. By the end of the week, more than 75% of the index will have reported bringing the season to its penultimate segment: retail. Until then, the season is unfolding largely as expected, with earnings growth in the low single digits and the consensus estimate for Q4 falling sharply.

Equity markets continued to sell off last week despite some better-than-expected earnings reports. The move was driven by hot economic data that points to persistent GDP growth, consumer demand, and inflation. With the FOMC meeting slated for the week, the risk is that hawkish Fed rhetoric will intensify and may telegraph the next policy move as an increase in rates. In this scenario, the S&P 500 could shed another 10% or more before hitting its bottom. The S&P 500 shed more than 2.5% for the week, bringing the index below the critical 4,150 level. If the market doesn't snap back this week, the odds are high that the selling will continue. The question now is what could turn this market around, and it looks like it will take a great deal. The market may not be able to regain its footing until later in 2024 once the economic headwinds subside and inflation is finally tamed, or not.

Equity markets deepened their sell-offs after another round of good-news-is-bad-news. The Q3 GDP was hotter than expected on consumer spending, business inventories, building activity, and government spending. The takeaway is that the data may not lead the Fed to hike rates again, but it cements the idea that rates will stay high indefinitely. The US consumer is resilient and continues to spend in the face of higher prices; it may take some time for it to run out of momentum. The next big hurdle for the market is today's reading of the PCE price index. The index is expected to accelerate from the prior month and may be hot enough to keep the market moving lower. If so, the S&P 500 could shed another 5% to 10% before hitting a firm bottom. Earnings will also be a factor in Friday trading. Reports from names like Amazon, Exxon, and Chevron are due before the open and will be market-moving events.