US Stocks Set To Start Fresh Week On Positive Note As Traders Take Inflation Data In Their Stride: Analyst Explains Why Rally Will Likely Extend Through 2024

U.S. stock futures point to a higher opening on Monday as the market reopens after a long weekend. The price consumption expenditure index released Friday showed that the Federal Reserve’s preferred inflation gauge rose in line with expectations. Although Fed Chair Powell said on Friday that the central bank wasn’t in a hurry to cut rates, the market has begun discounting downward rate adjustments, beginning in June.

Commenting on the data, Jeffery Roach, chief economist at LPL Financial said, “The trajectory for consumer spending is weakening, especially since real disposable incomes declined in February. Core services inflation is slowing and will likely continue throughout the year.”

“By the time the Fed meets in June, the data should be convincing enough for them to commence it’s rate normalization process.”

Cues From Previous Week

U.S. stocks closed the holiday-shortened week ended March 28 on a mixed note, with the tech stocks reporting modest losses for the week, while the broader S&P 500 Index and the Dow Industrials recorded gains. The latter two ended at fresh record highs.

After starting the previous week on a weak note amid profit-taking after the Fed meeting, stocks showed lackluster sentiment yet again on Tuesday. On Wednesday, they snapped a three-session losing streak and advanced solidly before ending the final trading session on a mixed note.

Index Week’s Performance (+/-) Quarterly Performance (+/-) Value
Nasdaq Composite -0.30% +9.11% 16,379.46
S&P 500 Index +0.39% +10.16% 5,254.35
Dow Industrials +0.84% +5.62% 39,807.37
Russell 2000 +2.54% +4.80% 2,124.55

Insights From Analysts:

Carson Group’s Ryan Detrick pointed to data that suggests the market’s upward momentum could continue this year. He noted that since 1950, the S&P 500 Index closed the first quarter higher than the December lows in 37 years, while in the remaining 37 years, it didn’t. If the December low wasn’t violated, the market was higher 95% of the time the average gain has been 18.8%, he said.

Futures Today
Futures Performance On Monday ( as of 7:15 a.m. EDT)
Futures Performance (+/-)
Nasdaq 100 +0.47%
S&P 500 +0.32%
Dow +0.31%
R2K -0.45%
In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) advanced 0.40% to $525.17, and the Invesco QQQ ETF (NASDAQ:QQQ) rose 0.50% to $446.23 according to Benzinga Pro data.

Upcoming Economic Data:

The job market is likely to take center stage in the unfolding week, with a slew of data on the labor market due. The chief among them are Friday’s non-farm payrolls report for March, ADP’s private payrolls report, the weekly jobless claims data and the February Job Openings and Labor Turnover survey.

Traders may also turn their attention to S&P Global’s final purchasing managers’ indices for the manufacturing and services sectors in March, along with the Institute of Supply Management’s PMIs for both manufacturing and non-manufacturing, as well as several speeches from the Federal Reserve.

On Monday, S&P Global will release its final manufacturing PMI at 9:45 a.m. EDT. The flash reading released earlier in March came in at 52.5, up from 52.2 in February.

The Institute of Supply Management’s manufacturing PMI, due at 10 a.m. EDT, is expected to show that the contraction continued. The index is widely expected to come in at 48.5 for March, up from 47.8 in February.

The Commerce Department is due to release its construction spending report for February at 10 a.m. EDT. The consensus estimate calls for a 0.7% month-over-month increase in spending compared to the 0.2% drop in January.

The Treasury is due to auction three- and six-month notes at 11:30 a.m. EDT.

Fed Governor Lisa Cook will speak at 6:50 a.m. ET.

See also: Best Futures Trading Software

Stocks In Focus:

Commodities, Bonds, and Global Equity Markets:

Crude oil futures edged down 0.18% to over $83.02 on Monday after they gained 3,12% in the past week. Gold futures last traded at a record $2,267.55 per troy ounce, up about 1.30 percent. The yield on the benchmark 10-year Treasury remained around the 4.2% level.

Bitcoin (CRYPTO: BTC) pulled back and traded under the $70,000 level.

Among equity markets, the ones open for trading in Asia closed mostly higher, led by China. Chinese stocks received support from the Caixin manufacturing PMI that came in slightly better than expected. On the other hand, the Japanese, Indonesian and Taiwanese markets retreated. A survey showing a dent to large Japanese manufacturers’ confidence in the first quarter weighed down on the stocks in the country.

The Australian, New Zealand and Hong Kong markets as well as a majority of European markets, including the U.K., Germany and France, were closed for the Boxing Day holiday.

Read Next: Did Bitcoin, Gold Or S&P 500 Make You Richer This Quarter? What $1000 Invested In These Asset Classes Would’ve Returned

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