Last week was brief yet turbulent for stocks, which ultimately closed higher than their starting points. Initially, the S&P 500, Nasdaq Composite, and Nasdaq-100 set new record highs boosted by NVIDIA's surge, briefly making it the world's most valuable company, surpassing Microsoft.
However, post the Juneteenth holiday, the major indexes stumbled as tech stocks saw profit-taking and corporate buyback blackouts ahead of the upcoming earnings season. Friday's "triple-witching" event, where various stock options and futures expire simultaneously, heightened market volatility.
This week, investors are closely watching the Federal Reserve’s PCE inflation report, along with consumer sentiment and inflation expectations, for insights into the near-term economic outlook.
🇺🇸 CB Consumer Confidence Index — June 25, at 17:00 GMT+3
The week begins with a key release of the CB Consumer Confidence Index, which is crucial for understanding consumer sentiment. This data can significantly impact major indexes such as the Dow Jones Industrial Average, S&P 500, and Nasdaq 100, as well as influence the strength of the US Dollar.
Starting the week, the Dow Jones Industrial Average led with a nearly 2% increase, while the S&P 500 and Nasdaq 100 also closed higher by approximately half a percent. Whether this upward trend continues may depend on the Consumer Confidence Index, which is expected to rise to 107.5 from the previous 102.00.
🇺🇸 GDP q/q — June 27, at 15:30 GMT+3
This report offers a current assessment of the economy's performance compared to the previous quarter. The second estimate, released in May, indicated a slowdown in the U.S. economy to a 1.3% annualized growth rate in Q1, down from 3.4% in Q4, attributed to declines in consumer spending, exports, and government expenditures. The final estimate is anticipated to reaffirm these figures.
The data's impact on the US Dollar can be significant, as it provides insights into the overall strength and growth trajectory of the economy. Lower-than-expected growth figures could potentially weaken the Dollar, as they might suggest reduced economic momentum and less favorable investment conditions compared to other currencies.
🇺🇸 Core PCE Price Index — June 28, at 15:30 GMT+3
This report provides a snapshot of consumer spending trends by tracking average monthly expenditures, excluding volatile items like food and energy. It serves as a key indicator for FOMC policymakers who use the annual Core PCE Price Index to gauge inflation. Following lower-than-expected May CPI figures, economists, policymakers, and market participants are closely awaiting this report to assess whether the trend of lower inflation continues.
As one of the most significant releases of the week, its implications extend to major indexes such as the Dow Jones, Nasdaq, and SPX500. The data's reception could influence market sentiment and trading activity, particularly if it diverges significantly from expectations, impacting investor expectations on economic health and monetary policy.
🇨🇦 GDP m/m — June 28, at 15:30 GMT+3
Announcing the upcoming release of the Canadian GDP m/m, which is expected to remain unchanged at 0.0%, consistent with the previous reading. This figure holds significance for USD/CAD, especially as the pair appreciates near 1.3700 at the start of the week following the Fed's decision to delay anticipated rate cuts.
The GDP data will be closely watched as it could impact market expectations regarding economic growth in Canada, potentially influencing the exchange rate of USD/CAD.
🇪🇺 EU Leaders Summit — June 27 & 28
On June 27 and 28, the European Union leaders' summit will take place over two days, covering economic topics. The outcomes of the summit will influence future monetary policy and the ECB's decision on the key interest rate, which remains very high.
We recommend monitoring the summit results as they may impact the DAX index quotes as well as the EUR/USD currency pair. It is worth noting that at the beginning of the week, EUR/USD hangs near its lowest level since early May and seems vulnerable below the 1.0700 mark. You can use this in your trading strategy.
That's it for this week! 👋
