The Week Ahead
The big event this week is Tuesday’s midterm elections. I expect some volatility around the event; however, most of the bad news seems priced in.
Last week, the FOMC statement combined with poor earnings results from key technology companies helped bring the S&P 500 back down to its cloud support:
When we have large gap-ups or downs, typically this gap is filled. For this gap to be filled, the index needs to trade back up to the 7691 level, from Friday’s close of 7580:
In addition to the midterm elections, Apple (AAPL) and Palantir (PLTR) release earnings after the close on Monday.
On Tuesday (election night), AMD releases earnings, followed by the ISM Services PMI report Wednesday morning.
Investors will watch Wednesday’s report closely, as services is one of the areas where inflation has been the “stickiest”.
On Thursday, we have Initial Jobless Claims. Jobless claims have remained low, so any major uptick in claims will signal the labor market is starting to crack.
Then on Friday, Nonfarm Payrolls and the University of Michigan’s Consumer Sentiment report will be released.
This week's data, including the results of the midterm elections, will weigh on the outlook for the next FOMC meeting. Currently, the futures market is indicating nearly a 75% chance that the Fed will raise rates at the December meeting:
New here?
The Rotation Report is a daily look at where money is moving in the market. Friday’s full report is always free.
Subscribe for free to get it, plus the first half of every daily note.