Fed officials are hinting at high rates for longer, but the lack of bad news has limited the downside.
The pause in the rally comes after a sizeable rally that commenced in the second half of last week and lasted until the start of this week. This was driven by various factors, including better-than-expected earnings, weaker US data to help increase the odds of a rate cut and an announcement from thethat it would taper its balance sheet runoff to $25 billion from the current monthly pace of $60 billion in Treasurys.
Claims are seen rising by 212K compared with 208K the week before. Let’s see if we will see signs of a weaker labour market show in the latest weekly jobs data.survey into focus. It has climbed steadily from 2.9% in January to 3.2% in April. With recent economic data weakening, will inflation expectations also ease?
CPI has consistently beaten expectations since the turn of the year. The Fed and stock market bulls will be hoping to see a softer print for a change, else rate cut expectations could be pushed out further., although the momentum seems to have been lost for now. So, a bit of a pullback should not come as a surprise, especially as we don’t have a lot to look forward to from both the economic and earnings calendars, and in light of the weaker earnings after the US close on Wednesday.
Meanwhile, on the upside, short-term resistance comes in around 440.00. A close above this level could see the index take out the March all-time high of 449.34.Be sure to check out InvestingPro to stay in sync with the market trend and what it means for your trading. As with any investment, it's crucial to research extensively before making any decisions.
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