Stocks Week Ahead: CPI to Get Final Say on the Size of Rate Cut

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Nasdaq 100,S&P 500,United States 2-Year

Market Overview Analysis by Michael Kramer covering: USD/JPY, Nasdaq 100, S&P 500, United States 2-Year. Read Michael Kramer's latest article on Investing.com

report to show a 0.2% month-over-month increase for both headline and core. Meanwhile, headline CPI is expected to slow to 2.6% year-over-year from 2.9%, andSwaps are pricing in a CPI miss, with the current market expectation for headline CPI at 0.1% month over month and 2.5% year over year.

The 2-year recently hit its lowest closing level since September 2022, which is significant, with the next level of support now around 3.45%appears to be in a downward phase. This likely means we could see some short-term bounces that push the market higher, but according to the current cycle, a sustained turn higher might not occur until the beginning of October.

Additionally, note that the 120-day minus the 20-day moving average has turned lower, signaling that systematic funds are now likely sellers.is also at a critical level, having fallen back to its 61.8% retracement level. If the NASDAQ continues to head lower, the 61.8% retracement level at 18,404 is unlikely to hold for long, and the index could move lower at some point this week.has also been relatively weak.

So, if we get a weak CPI report and the USD/JPY strengthens, it will likely pull the SMH down and the entire market with it, as the SMH has been trading closely with the USD/JPY.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.

 

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