S&P 500 (SPY) Report – 11/15/23

Good morning traders!

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

US stock futures are gearing up for another possible rally, driven by optimism that the recent cooling in inflation might lead to a pause in interest rate hikes. This sentiment is bolstered by strong performances in the Nasdaq, Dow Jones Industrial Average, and S&P 500 futures. Tech stocks, in particular, are enjoying a recovery, having their best session since April. This positive trend in the stock market is largely fueled by the unexpected easing of US price pressures, which has sparked speculation that the Federal Reserve might maintain current rates or even reduce them in the near future.

The retail sector is under the spotlight, with Target’s shares surging about 15% in pre-market trading after third-quarter earnings exceeded expectations. This indicates the resilience of US consumers despite higher borrowing costs. However, this positive news from individual companies like Target hasn’t broadly lifted retail sector stocks. Investors are now looking forward to more insights into consumer spending patterns, with upcoming data on US retail sales and producer prices expected to shed further light on inflation trends.

Internationally, China’s consumer spending is showing signs of recovery, adding a positive note to the global economic outlook. This comes at a crucial time when US President Joe Biden and China’s Xi Jinping are set to meet, potentially impacting the global economic landscape. Domestically, Wall Street is also keeping an eye on Washington, where lawmakers are working to prevent a government shutdown. The House of Representatives has already passed a bill to avert this, and it’s now awaiting the Senate’s approval.

The recent consumer price index report, showing no increase and hinting at a possible end to the Federal Reserve’s rate hikes, has been a significant driver of market optimism. This optimism is evident in the gains across major indexes like the S&P 500 and Nasdaq Composite. However, experts advise caution that the Federal Reserve might not cut rates in the near term, especially considering the strength of the housing market. Upcoming inflation data, including the producer price index, will be crucial for investors to gauge the future direction of the economy and the stock market.

Wednesday Economic Events:
MBA Mortgage Applications 7:00am ET
PPI-Final 8:30am ET – High Volatility Expected
Retail Sales 8:30am ET – High Volatility Expected
Empire State Mfg Index 8:30am ET
Business Inventories 10:00am ET
EIA Petroleum Report 10:30am ET – High Volatility Expected

Fed Speaker Scheduled:
Michael Barr 9:30am ET
Thomas Barkin 3:30pm ET

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