Another Month Without a Rate Hike

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Last Week’s Market Activity

This week we saw the inverse of last week’s market activity, as the Russell remained roughly flat week over week, and the S&P, Dow, and Nasdaq were up roughly 1-3%.  This rally was led by CPI numbers meeting expectations and another month without a Fed rate hike.  Although Chairman Powell tried to communicate to markets that the Fed is still hawkish by saying there may be a couple of rate hikes left, markets remained relatively unphased by his commentary.  Unfortunately, this week will not be as exciting as last week. However, we do still have some important events to look forward to!

Macroeconomic Indicators

This past week, we saw CPI come in at expectations across the board, with year-over-year CPI and core CPI coming in at 4.0% and 5.3%, respectively.  As we mentioned previously, the Fed has gone another month without raising rates, which is great for the market and the economy as a whole.  Although Powell made it sound like there may be more rate hikes in the future, the market as a whole doesn’t seem to believe him.  The rally that we’ve seen the past few weeks has continued, with some of the largest companies in the world, like NVIDIA, hitting new record highs.

Upcoming Market Catalysts

This week will be quite a bit slower than the previous week in terms of economic data releases.  This is in part due to the shortened trading week. However, there are still a couple of important releases you should pay attention to, beginning with housing starts on Tuesday.  We’ll also get information on existing home sales on Thursday. These will be important metrics for tracking the health of the housing market. Although home builders have been doing quite well recently, the competitive landscape of the residential housing market has changed quite a bit over the last year.  

Notable Earnings Releases

This week, we have a few large companies reporting their earnings, such as the ones listed below:

06/20 – FedEx Corporation (FDX)
06/21 – KB Home (KBH)
06/22 – Accenture plc (ACN), Darden Restaurants (DRI), FactSet Research Systems (FDS)
06/23 – CarMax (KMX)

We’ll start the week off hearing from FDX, which will be a great indicator of how the consumer is faring and will also foreshadow how UPS fared during the past quarter.  

We’ll also get to hear from KBH, one of the largest developers of new housing in the country.  It’ll be particularly important to pay attention to their backlog of homes, as well as their upcoming pipeline.  

Lastly, we’ll hear from KMX, which will give us an idea of how the used auto market is performing.  We’re likely to see a continued downtrend in the space as interest rates remain at decade highs, and demand pulls back.  However, listening to their commentary will be pivotal.