SPX: a rate cut in (not) expected
The oversold sentiment was holding the stock market during the previous week, however, the soft PCE report on Friday, brought back some optimism. The investors continue to be focused on the economic cycle movement, where small-cap indices gained during the week, while tech heavy indices were on a losing track. In this sense, Russell 2000 gained 1.67% during the week. The S&P 500 started the week around the level of 5.566, however, the lowest weekly level reached was 5.400. The index is ending the week at the level of 5.459. The industrial and materials stocks are currently in focus of investors, in anticipation that the environment of decreased interest rates would help these businesses in the future period. The tech companies included in the S&P 500 gained around 1% during the week.
The main macro driver of the stock market during the previous week was the PCE Index posted on Friday. The headline PCE was increased by 0.1% on a monthly basis and 2.5% y/y which was fully in line with the market estimates. The analysts are currently anticipating more rate cuts during this year, as inflation is evidently slowing down. The FOMC meeting is scheduled for the week ahead, where some further investors re-positioning might be expected, based on Fed`s rhetoric in an after-the-meeting conference.
The main macro driver of the stock market during the previous week was the PCE Index posted on Friday. The headline PCE was increased by 0.1% on a monthly basis and 2.5% y/y which was fully in line with the market estimates. The analysts are currently anticipating more rate cuts during this year, as inflation is evidently slowing down. The FOMC meeting is scheduled for the week ahead, where some further investors re-positioning might be expected, based on Fed`s rhetoric in an after-the-meeting conference.
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