SPX-Inflation alert...

The $S&P 500(.SPX)$ ended a five-week streak of straight gains after a mixed trading day on Friday closing down 0.8%.

It's been a tough week with a 1.4% drop for the week as a whole, marking its worst weekly performance since early March.

The $NASDAQ(.IXIC)$ and the $DJIA(.DJI)$ also had their worst weeks since March. The Nasdaq had seen eight straight weeks of gains.

$Tesla Motors(TSLA)$ $Apple(AAPL)$

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MAIN EVENTS

BOE-Powell Testimony

This week, the world's central bankers continued to take a tougher stance, with particularly rapid rate hikes. The poor inflation report in the UK, where prices rose 8.7% on a year earlier, was followed by a surprise half-point rate hike from the Bank of London. England, which echoed warnings issued by Federal Reserve Chairman Jerome Powell. During his testimony before Congress this week, Powell stressed that fighting inflation was a process that would take time.

US PMI

Economic data released this week by S&P Global also raised concerns among investors about a possible recession. Although the S&P PMI for the United States rose for the fifth consecutive month, manufacturing activity showed signs of weakness. GDP is still on track to grow 2% in the second quarter, according to Chris Williamson, chief economist at S&P Global Market Intelligence. However, the details of the latest PMI report are concerning, with the manufacturing sector in decline after three months of growth. Factories are experiencing a severe drop in new orders, leading to reduced activity.

MARKET SCENARIO

Until last Thursday, stocks appeared to be heading for new highs. The S&P 500 had risen for six straight sessions and was within 8% of its all-time high. However, some observers believe a break was needed this week, citing possible reduced liquidity in the market. Others believe that market participants interpret central bank rate hikes as an important signal that conditions will tighten further until set targets are met.

• SPX and VIX spot tend to move with a negative correlation

SPX and VIX

• The odds of a Fed rate hike in July exceed 75%. In fact, the US 2-year yield remains well above 4.23%, with record highs in prospect.

SPX LEVELS

• Key levels: 4400-4375-4300

• Upper zone: 4360-4375-4400-4450 (major resistance)

• Lower zone: 4320-4300 (major support)

SPX Levels

AGENDA

The week will continue to be marked by interventions from central bankers.

• Conference Board US Consumer Confidence Index (Tuesday).

• The first estimate of German inflation for June - Chinese PMI indices (Thursday)

• US PCE inflation (Friday).

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