Consumer Confidence Down
A gloomier outlook reported by the University of Michigan index of consumer confidence released last Friday caused yields to fall.The spread of the delta variant of Covid has dampened the confidence of the consumer to the lowest level since 2011, according to Bloomberg.com.
Nonfarm Payrolls Up
Inflation will gain most of the attention this week, with data reports expected on consumer and producer level inflation. With the labor market on the mend, inflation will continue to be on investors’ minds as both labor and inflation are key factors that influence the Federal Reserve’s decisions on policy. The consumer price index and the producer price index will be released on Wednesday and Thursday, respectively.
Global Markets Rocked by China
With U.S. markets focused on the economic recovery and rising inflation, global markets were rocked by China’s social crackdown now reaching its capital markets. Several of China’s regulatory agencies cracked down on overseas IPOs, resulting in China’s stock market falling more than 10% early in the week.
Cloud Computing Competition Up
Competition in cloud computing between Amazon’s AWS, Google Cloud, and Microsoft’s Azure is getting more intense as it makes up a major source of revenue growth for all three companies. Plus, earnings season is in full swing.
Housing Market Cooling
Housing market looks to be cooling as existing home sales dropped by 0.9%. Lumber is down 60% from recent highs. Earning season picks up this week with reports from airlines, railroads, drug companies and technology.
Apple Driving Market Rally
Last week, meme stocks grabbed the headlines while stocks in general inched to record highs. Read more about upcoming economic reports and possible Fed responses in the Week Ahead.
Fed’s Comments Push Equities Up
Sowell acknowledged that inflation had increased notably in recent months, but he reiterated that he saw it as transitory due to supply issues and the reopening of the economy. He believes the labor market has a long way to go and needs continued support. The bullish comments on supporting the economy for as long as it takes pushed equities higher for the week.
Fed Views Looking Hawkish by 2023
On Wednesday, the Fed raised its inflation expectations, saying that it is considering tapering its purchases of Treasuries and mortgage securities and showed a slightly more hawkish view towards 2023 rate hikes. Read more about expectations associated with Powell’s upcoming congressional testimony.
Used Car/Truck Prices Spike
The demand for used cars and trucks has surged as semiconductor shortages have crippled new car production and populations have shifted to suburbs. Read more about what is driving consumer prices up in the Week Ahead.
Meme Stocks Grabbing Headlines
Last week, meme stocks grabbed the headlines while stocks in general inched to record highs. Read more about upcoming economic reports and possible Fed responses in the Week Ahead.