This Week in the Market
The market agitation from earlier in the week was attributed to negative market momentum and spicy Consumer & Producer Price Index (CPI) reports. The month-over-month changes in prices far exceeded expectations, and they don't even include gas prices in that calculation. Still, when looking at the past six months of data, total CPI was running at an annualized pace of 5.0%. Can you smell hyperinflation? Yet the market found its legs and put together a decent rally.
Meanwhile, in global pandemic news, the CDC said fully vaccinated people can engage in most activities without masks.
It will be interesting to see how the growth/technology stocks perform moving forward when money has been flowing into the cyclical/value stocks on reopening/inflation expectations while analysts have been calling for sustained underperformance. Seems like a recipe for volatility. Many growth stocks are down substantially from their peaks in February. Maybe fundamentals, technical analysis and the other usual "stuff" will start to matter again after a long time of being out of sync.
The week ahead will have the recent FOMC meeting minutes released, which will provide insight into how the Fed governors are handling the post-pandemic economy.
Earnings season will be winding down, but there are still a plethora of retailers like Home Depot, Lowes, Target, and Ross Stores reporting this week that should keep things interesting,
With the Colonial Pipeline hack fresh in everyone's mind, the oil and natural gas inventory numbers due out midweek should receive some extra scrutiny. Relief from pain at the pump will be hoped for but it's still too early to tell how things will play out. Tune into those petroleum inventory reports!
On the economic front this week, we'll get a good look into the hot, hot, hot housing market, with reports on existing home sales, mortgage applications and housing starts for April. We know home prices have been soaring (how many times a week do you check Zillow?), but mortgage rates have been rising. Did that cool down the housing market overall? We shall see!
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