S&P 500 (SPY) Report – 02/27/24

Good morning, traders!

The S&P 500 ($SPY) is trading slightly above yesterday’s close. Let’s get into it…

U.S. stock futures paused after reaching record highs, indicating a cautious mood among investors as they awaited an important inflation update. The Dow Jones Industrial Average and S&P 500 futures showed little movement, maintaining their positions following recent highs, while Nasdaq 100 futures also remained steady, reflecting a strong performance in technology stocks. This comes at a time when the market is preparing for new inflation data that could test the sustainability of the recent rally, especially following Nvidia’s impressive results.

The upcoming inflation data, particularly the Personal Consumption Expenditures (PCE) index reading, is highly anticipated as it is the Federal Reserve’s preferred measure of inflation. This reading is crucial for gauging the potential timing of any rate cuts, which has been a topic of much debate. Investors are wary, remembering how an unexpectedly high Consumer Price Index (CPI) report earlier in the month caused a sell-off in stocks. The outcome of the PCE index could either validate the recent bullish trend in the stock market or challenge it, depending on whether it signals higher than expected inflation.

Among corporate news, Berkshire Hathaway edged closer to a $1 trillion market value, buoyed by a record annual profit and positive remarks from Warren Buffett about the company’s durability and the contributions of Charlie Munger. Meanwhile, Domino’s Pizza saw its shares rise in premarket trading after announcing an increased dividend and exceeding fourth-quarter sales expectations. These developments highlight the ongoing impact of corporate earnings on market sentiment and individual stock performance.

The stock market is entering this crucial week on a strong footing, thanks to significant gains driven by Nvidia’s earnings and the broader inclusion of tech stocks, such as Amazon’s addition to the Dow Jones Industrial Average. With several economic indicators and corporate earnings reports on the horizon, investors are closely monitoring the potential for continued AI-driven momentum in the market against the backdrop of inflation and economic uncertainties. The direction of the market will likely be influenced by the forthcoming economic data, including the much-watched PCE index, and how it aligns with or challenges the current market optimism.

Tuesday Economic Events:
Durable Goods Orders 8:30am ET – High Volatility Expected
Redbook Sales 8:55am ET
CaseShiller HPI 9:00am ET
FHFA House Price Index 9:00am ET
Consumer Confidence 10:00am ET – High Volatility Expected
Richmond Fed Mfg Index 10:00am ET
Money Supply 1:00pm ET
API Crude Oil Data 4:30pm ET

Fed Speaker Scheduled:
No Fed Speakers Scheduled

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