Market Awaits a Week of Fed Speakers
Will there be signs that rate cuts may be back on the table?
You've reached your free article limit
You've read 0 of 1 free Pro articles.
* Equity futures point to a positive start to a week jam-packed with Fed speakers
* The market will be looking for signs rate cuts may be back on the table
* Our strategy, which has allowed the portfolio to move past the S&P 500, remains to follow the data and position the portfolio accordingly
As we get ready for the first full week of trading in May, equity futures point to further gains ahead following last Friday’s weaker-than-expected April Employment Report. Because that report showed the weakest level of job creation and a step down in wage pressures, we are seeing another round of hopium creep back into the market when it comes to rate cuts.
While we can understand the argument if you look at just that data point, but if you factor in the April PMI prices paid data from ISM, which hit 2024 highs, we will argue the Fed is going to take its sweet time. In a week of little fresh economic data but a slew of Fed speakers, we can expect the market will be taking in their comments and expectations. So will we.
Following the data and positioning, the portfolio served us well as it allowed us to not only catch up to the S&P 500 in recent weeks but as we entered May, move past it on a year-to-date basis. Our hard work and discipline are paying off but before we start back-slapping ourselves, we are only one-third of the way through the year.
As we’ve seen over the last few quarters, things can change sometimes quickly. Rather than rest on our laurels, we’ll continue to follow the data be it economic, sector, or thematic, and heed the technicals for the market, our holdings, and prospective ones.
For example, oil prices retreated in April after a steady climb higher during the four prior months, but they are back on the rise this morning. The reason? Saudi Arabia hiked June crude prices for most regions and the prospect of a Gaza ceasefire deal faded, renewing concerns that the Israel-Hamas conflict could still widen in the key oil-producing region.
If oil prices trend higher, it will be positive for our shares of the Energy Select Sector SPDR Fund XLE, but another reason inflation may not fade as fast as some hope.
Coming up later today, we’ll update our portfolio table for earnings expectations, and panic points. We’ll also have some comments on April results from Hon-Hai, better known as Apple’s AAPL manufacturing partner Foxconn.
Several charts caught our eye over the weekend, and we’ll be sharing them as well ahead of quarterly results after today’s market close from Axon AXON and Coty COTY.
At the time of publication, TheStreet Pro Portfolio was long XLE, AAPL, AXON, COTY.
