New Inflation Data To Bring A Critical Week For The Stock Market

Accoridng to the latest reports, it seems that there is some new inflation data that will bring a critical week for the stock market. Check out the latest reports below.

Business Insider notes the fact that the next week is one of the most critical weeks for the stock market this year. This is happening as investors brace for a Federal Reserve interest rate decision that could bring a pause in rate hikes and new CPI inflation data.

Fundstrat’s head of Research, Tom Lee, said that as stocks enter a new bull regime. It’s also worth noting the fact that the market could get jolted by volatility depending on how the new inflation data shakes out and how the Fed reacts to that data at its policy meeting on June 13-14.

“With market consensus expecting the core month-over-month inflation gauge to be 0.4% for the month of May, investors would be surprised if inflation came in closer to 0.3%,” the online publication the Business Insider notes.

It’s also worth noting the fact that this would be a positive surprise because it would bolster the Fed’s potential decision to pause interest rate hikes this month and in July.

“If May Core CPI [is less than] 0.4%, then we see these odds [of interest rate hikes] dropping to zero for each month,” Lee said in a Friday note.

We also have to point out the fact that Lee is confident that inflation is indeed tracking lower than consensus based on real-time measures of CPI. The same online publication highlights the fact that inflation is actually nearing the Fed’s long-term target of 2%.

“If this plays out, the Fed’s pause will morph into a data dependent mode, where the bar is raised for further [interest rate] hikes,” Lee said.

He continued and pointed out:

“We expect investors to see this as a green light for risky assets, which means equity investors will not be fighting the Fed.”