The shortened stock markets will open with investors eying several key economic data points. Today, look out for consumer confidence data. The ever-rising S&P 500 (SPY), up 5.3% this month, and Nasdaq (QQQ), up by 8%, contradicts weak consumer confidence.
The weak stock performance in Dollar General (DG), Target (TGT), and Dollar Tree (DLTR) are the only clues that correlate to falling consumer confidence.
On Friday, the U.S. will report April 2024 personal income and expenditures. The PCE inflation data, which excludes “volatile” food and energy prices, is the most important report. The Federal Reserve has a high weighting for core PCE data when it sets its interest rate policy.
Bond investors should watch for higher volatility in the longer-dated Treasuries. ETF traders might expect the 7-10 year (IEF) and the 20+ year (TLT) to fall if core inflation is too hot.
On the earnings front, Costco Wholesale (COST) is the most-watched retail firm reporting its results. If the catchphrase stock list included non-technology firms, Costco would be considered a magnificent 7.
Luxury goods firm Ulta Beauty (ULTA) will give investors an idea of the health of consumer spending. If the firm warns on weak demand for make-up and cosmetics, it might send the consumer discretionary sector lower this week.
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