Key Points
- PPI came in hotter than expected.
- Next week features a quiet news cycle, but a key period in the US 2024 election cycle.
- Natural resistance is on the horizon for the US500 at 5700 and 6000.
Market Overview
Another day, another all-time high in the S&P 500 (US500). At press time, the US500 is up more than 3.25% on the month. Bidders continue to dominate the action as prices rally above the 5650 mark. One thing is for sure — if you’re short the US500, you’re losing money hand over fist.
US PPI
Thursday was a huge session in the financial markets, headlined by US CPI. This morning was a bit quieter, with PPI dominating the news cycle. The Producer Price Index, or PPI, measures inflation from the seller’s perspective. It is a decimalization of the prices paid to producers for goods and services. While it is a secondary metric compared to CPI, many traders believe PPI carries a greater significance.
Today’s figure was 0.2% month-over-month, above the expected 0.1%. While this was a hawkish reading for the USD, stocks still grind higher. Don’t look now, but it appears as if the dovish J. Powell and solid CPI numbers are dictating policy.
US500 Technical Outlook
As we roll into the weekend break, the US500 is in a complete uptrend. In fact, there isn’t much resistance in view. Traders are watching for signs of pricing exhaustion in front of each big-round-number. The next one up for scrutiny is 5700.
From a speculator’s perspective, it’s tough to do anything but buy US stocks. And, the S&P500 is the most diversified stock index in America. Until we see a major shift in global geopolitics, or Fed policy, prices will continue to grind higher. There will come a time when it’s prudent to go short; that time is not now.
Next Week’s Action
Compared to this week’s news cycle, next week will be a breeze. There isn’t much on the economic calendar. Perhaps the only major market mover will be the political news cycle. In the US, there is a growing call for sitting POTUS Biden to quit his bid for the 2024 election. Next week is likely to bring a final decision from Biden and the Democratic party. If Biden does step down, be ready for anything in the US500 as traders price fresh political uncertainty into the markets.
Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.
