Know that in the last days we were still very calm, we consider it appropriate that weekly we indicate the news that is important to see.
As Investing describes, it looks like the Federal Reserve’s comment that interest rate hikes may come earlier than expected will determine market sentiment this week and possibly months ahead as market participants take the market for a sharp change in stance towards monetary -credit policy.
As a result, the focus will be on Tuesday’s speech by Fed Chairman Jerome Powell, as well as statements by several other Fed officials during the week.
Friday’s personal income and spending data will also draw attention, especially on the PCE Core Price Index, the Fed’s preferred inflation indicator. Securities have been hit particularly hard and it looks like this trend will continue, at least in the short term.
In the UK on Thursday, the Bank of England will meet and the markets will watch for new interest rate hikes. So, here’s what you need to know to start your week.
According to Glassnode, in terms of macroeconomics, there is a striking resemblance to the 2017 macro when it comes to the long-term (blue) and short-term (red) supply balances of holders. The following table shows the relative supply of each cohort and whether they have gains (dark colors) or losses (light colors).
Based on the above, out of the $ 64,000 limit, long-term holders hold an additional 5.25% of working reserves, of which 1.5% are currently underwater (no withholding has been fulfilled). Thus, we can say that even though prices for many long-term holders are approaching the baseline, they continue to use HODL.
The Fed surprised the markets last week by announcing two possible interest rate hikes in 2023, earlier than the markets expected, while noting that it is also getting closer to the point where it could start talking about phasing out your $ 120. billion dollar monthly incentive program.
The shift in perspective was seen when St. Louis Fed Chairman James Bullard said Friday that the move towards faster monetary tightening was a “natural” response to economic growth and weak growth as the economy recovers from the coronavirus pandemic.
The question of whether the Fed will prompt to act faster than expected has already been on the rise in financial markets as the monetary policy meeting approaches.
Market participants will be watching statements by Fed Chairman Jerome Powell on Tuesday, when he appeared via satellite about the Fed’s emergency lending programs and current policies in front of the House of Representatives’ Coronavirus Crisis Committee.
In addition, several other Fed officials will appear during the week, and their comments will also receive a lot of attention, as markets await new signals about the future direction of monetary policy.
New York Fed Chairman John Williams and St. Louis Fed Chairman James Bullard spoke on Monday, while Cleveland Fed Chairman Loretta Mester and St. Louis, St. Louis Fed Chairman Francisco Mary Daly will do so on Tuesday.
Other Fed speeches this week include those from Atlanta Fed Chairman Raphael Bostic and Boston Fed Chairman Eric Rosengren.
US equities closed sharply lower on Friday, while the Dow and S&P 500 posted their worst weekly results since late October and late February, respectively. The Nasdaq Tech Index also closed lower.
The decline was marked by falling stock prices, falling commodity prices, as well as a rise in the dollar and US government bonds.
“I am not surprised to see a slight drop in the market. Not surprising at all, given the strong streak we’ve had over a very long period of time to see profit-taking periods, ”said at. Tim Grisky is chief strategist at Inverness Counsel, an investment firm based in New York.
Investors will closely monitor economic data released this week to see if the recent surge in inflation continues (consumer prices rose at their fastest pace in nearly 13 years in May).
May earnings and personal spending data are due Friday, including data on the core price index PCE, the Fed’s preferred inflation indicator.
The economic agenda also includes reports on new and completed home sales, durable goods orders, manufacturing and service sector activity, as well as a weekly report on first jobless claims, which sparked high expectations given the uneven economic recovery. labor market. …
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