Elevated Stock Market ahead of Busy Day of Economic Reports
On Tuesday, the stock market closed with a slight increase as investors anticipated a packed day for Wednesday that includes reports on personal income, home sales, durable goods, and more.
These reports are expected to greatly impact the US market, just after the market has already surged in recent weeks after the US election results. We saw some pullback after record highs across all three major indices, but we could be seeing the beginning of another bull run, if these reports turn out to be positive for the economy.
The Nasdaq Composite gained 0.63% as the market closed on Tuesday. The Dow Jones Industrial Average climbed 123 points, or 0.28%. Finally, the S&P 500 added 0.57% to its previous total.
Most of these gains were fueled by speculation that the market would improve after today’s reports are released. We should see the US Unemployment Claims, which is expected to increase by 2,000 claims compared to the previous report. The Core PCE Price Index is expected to maintain a steady increase at 0.3%, and Personal Spending from month to month is expected to fall just slightly- from 0.5% to 0.4%. At the same time, the report for Personal Income is expected to show the same 0.3% gain as last month.
Inflation Improvement Expected
These economic indicators are all helpful in determining the current US inflation, but the Federal Reserve pays particular attention to the PCE, or personal consumption expenditures price index. With that index expected to increase at a steady rate, the economy should be on track to see slightly lower inflation very soon.
That could lead to another Federal Reserve interest rate cut. The next one is expected soon, and like the previous ones this year, it could cause the market to go bullish. As the Fed cuts interest rates further, that shows their growing confidence in the inflation rate coming down. They have been very hardline this year about not making any cuts on interest rates until the inflation rate moved closer to 2%.
Even though the PCE is the most significant inflation indicator on the long list of expected reports today, it is not the only one. Unemployment reports have had a marked impact on the economy, the stock market and the crypto industry in recent months, and investors will want to pay close attention to that report as well.
ABOUT THE AUTHOR
See More
Sidebar rates
Add 3442
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals