The decline in the stock market was attributed to a slightly hotter-than-expected March consumer price index (CPI) report, which caused Treasury bond yields to rise. Investors began to reconsider the number of interest rate cuts that the Federal Reserve may implement this year. Despite gaining back ground on Thursday due to a weaker-than-expected March producer price index (PPI) report, heightened tensions in the Middle East sent stocks back down. It’s important to note that long-term investors do not base investment decisions on rate cut expectations, as a strong economy ultimately leads to earnings growth.
Looking ahead, there are several key macroeconomic reports to monitor, including March retail sales, housing starts and building permits, and the March industrial production report. These reports will provide insight into the strength of the economy and potentially influence the Federal Reserve’s decisions regarding interest rates. Additionally, three Club names are set to report quarterly earnings, including Morgan Stanley, Abbott Labs, and Procter & Gamble. Analysts will be looking for indications of organic growth, margin performance, and revenue generation in these reports.
On Monday, retail sales data will be released, providing insight into private consumption and GDP. Tuesday’s housing starts and building permits report will be closely watched to assess the state of the housing market, while the industrial production report will offer insight into manufacturing demand. Wednesday will see earnings reports from companies like Abbott Labs and Prologis, among others. Thursday’s existing home sales report and Friday’s earnings reports from companies like Procter & Gamble will round out the week.
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