To The Moon

Summary of the week.

• U.S. stocks fell on Friday after the Federal Reserve's favorite inflation gauge showed the central bank's battle against rising prices would be far from over...

• The SPX and the Nasdaq had their worst week since Dec. 9.

$S&P 500(.SPX)$ fell 1.1% and 2.7% weekly. The index has fallen on five of the last six trading days and for three consecutive weeks.

$NASDAQ(.IXIC)$ fell 1.7%, bringing this week's decline to 3.3%. $NVIDIA Corp(NVDA)$

$DJIA(.DJI)$ fell 1%. With a drop of 3% on the week, the Dow Jones has fallen for four consecutive weeks, down 3.4% over the period. This is the biggest weekly decline in the Dow since Sept. 23.

Investors would joy

Main events

PCE

The price index for core personal consumption expenditures, which rose 4.7% year over year in January, led the selloff.

Economists had forecast an increase of 4.3%. Core PCE was up 0.6% from December.

• The data would spark calls for a sharp half-point hike in interest rates when the Fed meets again next month...

WALMART, HOME DEPOT

Earlier in the week, in Tuesday session, stocks fell sharply in a broad slump affecting all 11 S&P 500 sectors. during a turbulent day of retail profits. Consumer Staples stocks were a "safe haven", limited to just -0.4%.

This slump was reportedly brought on by a pair of dour outlooks from the management teams of Walmart and Home Depot.

• Both retail giants reported better-than-expected results for their latest quarters and raised dividends, but warned of a tough year ahead.

FOMC MINUTES

As for the FOMC Minutes, it would have made it clear that officials are determined to bring down inflation and will be closely watching the coming economic data.

• “Participants observed that tight policy should be maintained until incoming data provides assurance that inflation was on a sustained downward path to 2%, which is expected to take some time,” the report said. minutes.

GDP

Gross domestic product data shows the US economy grew at an annual rate of 2.7% in Q4, revised down from 2.9% reported in January.

LABOR MARKET

Jobless claims fell to 192,000 last week, below the consensus of 199,500, indicating a resilient labor market. This is bad news for the Fed, which is looking for signs of a weaker labor market that could lower demand for goods.

Market scenario

The broader pressure on stock prices of late has come from rising bond yields, which fell sharply in January but resumed their ascent in February. This reversal is due to changing expectations regarding the Federal Reserve's upcoming policy.

Investors started the year betting that the Fed was almost done with its interest rate hike campaign. But January's jobs and retail sales reports highlighted the fact that the central bank will still have to work to get inflation under control.

Futures markets are now pricing in a record federal funds rate of around 5.3% in July. That's nearly half a percentage point higher than a few weeks ago.

• The Nasdaq is now down 6% since early February. The higher yields rise, the more problems equity indices, and growth stocks in particular, will have. Could we relive the same scenario of 2022...

Agenda

The market will focus on a handful of key events next week. First the US durable goods orders (Monday), then the Conference Board's US consumer confidence index (Tuesday). The final ISM manufacturing indexes for February (Wednesday). The first estimate of Eurozone inflation in February (Thursday). Final February PMI indexes and the American counterpart, the ISM services index (Friday).

SPX Levels

Please find below the levels retained for SPX

• Key levels: 4000 - 3950

• Upper area: 4030-4075

• Lower zone: 3900

SPX levels

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