🍏Markets recovered from days of losses💰

It was a roller coaster trading day as indices swung from gains to losses and back to gains. As choppy as it can get, investors are digesting the latest economic data to predict the Fed’s next move. 

Thursday’s economic data portrayed a mixed bag of situations. First, the GDP, which showed a 2.7% economic expansion, is lower than the prior 2.9%. The labour market, on the contrary, continued to show enormous resilience as jobless claims dropped to 192,000 last week, lower than the consensus of 199,500. This isn’t good news for the Fed as it tried to cool the tight labour market that had supported solid income growth and inflation. 

We continued to be cautiously bullish on the general economy as pockets of strength proved the thesis for a soft landing. 

📮What are our dishes today? 🔭

It is going to be a truly heavy day for economic data. 

At 9.30 pm, a wide range of data will be released. Most importantly, the Core PCE Price Index, the Fed’s preferred inflation indicator, is likely to show growth of 0.4%, a rise from 0.3% in the prior period. This will be critical as we are seeing renewed inflation pressure in the economy, and that is likely to fuel a further headwind for stocks if it is materialized into economic reading. 

Personal spending on a MoM basis is also expected to climb by 1.3%, reversing its decline of 0.2%. 

Then at 11 pm, Michigan Consumer Sentiment for Fed will likely remain at the same level of 66.4. As a result, new home sales could increase to 620K from 616K in the previous period. 

Two main Fed speakers, Jefferson and Mester, will speak at 11.15 pm. Again, they may drum into the same idea of a higher for longer interest rate environment, which is now factoring into traders’ expectations.