S&P 500 (SPY) Report – 08/14/23

Good morning traders!

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

Stock futures experienced a mild increase on Monday, indicating Wall Street’s intention to recover from a challenging beginning to August. This movement comes in the wake of a recent downturn in stock prices, with the S&P 500 and Nasdaq Composite falling by 0.3% and 1.9% respectively last week. In contrast, the Dow Jones Industrial Average managed to ascend by 0.62%, marking its fourth week of gains out of the past five.

This upcoming week’s financial direction may be largely influenced by insights into the U.S. consumer’s current state. Anticipated earnings reports from major retailers like Home Depot, Target, and Walmart, paired with the impending release of July’s retail sales data, could offer some clarity. This data follows last week’s mixed inflation reports which suggested that while the pace of price increases has slowed down from its post-pandemic highs, it still overshoots the Federal Reserve’s 2% goal.

Jose Torres, a senior economist at Interactive Brokers, highlighted a crucial concern in a recent client note: whether businesses will transfer escalating wholesale costs to consumers and, if so, how consumers will respond to these price hikes. Torres underscored that such price adjustments would likely impact future Consumer Price Index (CPI) readings. This could then bolster arguments from the hawkish side of the Fed’s Federal Open Market Committee in favor of further rate hikes. Torres also noted that the current corporate earnings reflect the challenges posed by a decelerating economy and mounting financing expenses.

Monday Economic Events:
No Important Economic Events

Fed Speaker Scheduled:
No Fed Speakers Scheduled

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