Markets will open on Monday attempting to reverse last Friday’s Nasdaq (QQQ) and S&P 500 decline. The Federal Reserve received the core Personal Consumption Expenditure index data it needed to justify a rate cut. Still, core PCE excludes food and energy prices. These are necessities that consumers need daily.
Core CPE was only 2.9%. However, inflation rose by a double-digit percentage from 2020-2023.
Ahead of the Fed’s meeting on Tuesday and Wednesday, investors should watch consumer defensive stocks. Hints of no rate cut would further cap inflation rates. This would help household product names like Proctor & Gamble (PG), Kenvue (KVUE), Kimberly-Clark (KMB), Colgate-Palmolive (CL), and Unilever (UL).
Intel’s (INTC) weak outlook for server chip sales hurt its peers. KLA (KLAC) lost 6.6% last Friday, Applied Materials (AMAT) -3.32%, and Broadcom (AVGO) -2%. Watch all of these stocks try to rebound from last week’s losses. Markets will assume that Intel has company-specific issues that are not an industry-wide problem.
Among the companies trying to end their downtrend, Pfizer (PFE) needs to attract buyers. The stock risks re-testing its sub-$ $26 low from last month. Sofi’s (SOFI) quarterly earnings report might deter short-sellers, who have a 13.37% short interest against the stock.
In the EV market, Tesla (TSLA), which lost 13.6% last week, needs to hold the $180 level. Otherwise, its next leg down could send shares to the May 2023 low of $152.37.
