Employment data shows US economy adding 272,000 new jobs in May with a slight increase in unemployment rate to 4%
Federal Reserve to provide interest rate decision and updated economic projections on Wednesday
Fed's preferred measure of inflation is the Commerce Department's measure of personal consumption expenditures prices
Inflation data for May to be released on Thursday with an anticipated aggregate annual rise of 3.4% and core CPI showing a monthly gain of 0.3% and an annual rate of 3.5%
The upcoming week is set to bring significant economic news, with the Federal Reserve's interest rate decision and the release of inflation data taking center stage. Let's examine these events in detail and their potential impact on the market.
Firstly, on Wednesday, investors will be closely watching for signs from the Federal Reserve regarding its stance on interest rates. The Fed is expected to provide updated economic projections as part of its monetary policy statement. According to recent reports, there may be fewer interest rate cuts anticipated than previously thought in March.
Additionally, employment data has shown a growing US economy, with employers adding 272,000 new jobs in May and the unemployment rate edging up slightly to 4%. This economic growth could reduce the likelihood of further interest rate cuts.
On Thursday, inflation data for May will be released. Economists anticipate little month-over-month movement but an aggregate annual rise of 3.4%. Excluding food and energy prices, the core CPI is projected to show a 0.3% monthly gain and a 3.5% annual rate.
The Fed's preferred measure of inflation is the Commerce Department's measure of personal consumption expenditures prices.
These economic indicators will provide valuable insights into the current state of the US economy and could influence market sentiment moving forward.
Oracle shares jumped nearly 9% due to new cloud deals with Google and OpenAI, despite missing fiscal fourth-quarter earnings expectations.
Rentokil Initial shares increased about 7.5% as Trian Partners confirmed taking a significant position in the company and becoming a top-10 shareholder.
Accuracy
Federal Reserve's interest rate decision and May’s consumer inflation data are awaited by investors.
The Federal Reserve is expected to maintain its benchmark overnight borrowing rate between 5.25%-5.5%.
May’s consumer price index is forecasted to show a 0.1% increase from April and a 3.4% rise on a year-over-year basis.
Inflation and economic growth projections are expected to be adjusted in light of recent economic data releases.
The upcoming quarterly refunding update from the US Treasury will provide information on how much bond supply there will be.
, Jerome Powell, Chairman of the U.S. Federal Reserve, is set to speak during the conference celebrating the Centennial of the Division of Research and Statistics.
Inflation and economic growth projections are expected to be adjusted in light of recent economic data releases.
The upcoming CPI inflation report for May is expected to show little month-over-month movement but an aggregate annual rise of 3.4%.
Excluding food and energy prices, the core CPI is projected to show a 0.3% monthly gain and a 3.5% annual rate.
The Federal Reserve’s preferred measure of inflation is the Commerce Department’s measure of personal consumption expenditures prices.
The Fed is expected to adjust its dot plot, indicating fewer interest rate cuts than previously anticipated in March.
Economic data, such as the recent payrolls report and wage growth, point to a growing US economy which may reduce the likelihood of further interest rate cuts.
Investors will closely watch next week's inflation numbers and Federal Reserve meeting for clues on the justification of soft landing hopes that drove stocks to record highs
May inflation data must satisfy expectations of satisfactory growth with prices under control
Nonfarm payrolls increased by 272,000 jobs last month, exceeding forecasts
Accuracy
Investors will closely watch next week’s inflation numbers and Federal Reserve meeting for clues on the justification of soft landing hopes that drove stocks to record highs
The Fed will look to provide signals on rate cut plans later that day
Deception
(70%)
The article provides a neutral analysis of economic data and market trends. The author does not make any editorializing or pontification statements. There is no emotional manipulation or sensationalism in the article. The author reports on facts and quotes experts to provide context and perspective on the data being discussed. However, there are instances of selective reporting as the article focuses primarily on data that supports the idea of a 'Goldilocks economy' and potential rate cuts by the Fed, while downplaying or ignoring conflicting economic indicators such as a slowdown in manufacturing and revised lower first-quarter growth rate. The author also references non-peer reviewed sources without disclosure.
Despite the S&P 500’s march to new records, some investors worry the gains have concentrated in a few giant technology and growth names such as Nvidia, with the rest of the market far more tepid.
The bank recently upgraded its year-end S&P 500 target to 5,500, up 3% from where the index trades today.
This year's rally has lifted the S&P 500 up more than 12% year-to-date, on expectations the Fed can cool inflation without hurting growth.
Fallacies
(85%)
The article contains a few informal fallacies and appeals to authority. It also presents dichotomous depictions of the market's performance.
. . . this year’s rally has lifted the S&P 500 up more than 12% year-to-date, on expectations the Fed can cool inflation without hurting growth.
U.S. stock valuations remain well above historic norms, noted Ed Clissold, chief U.S. strategist at Ned Davis Research.
The bank recently upgraded its year-end S&P 500 target to 5,500, up 3% from where the index trades today.
U.S. economy produced $22.7 trillion of goods on an inflation-adjusted annualized basis in Q1 of 2024.
US economy grew at a pace slower than initially thought in Q1 of 2024.
Inflation rate for the year was 3.4% in April.
Consumer sentiment has been rising haltingly since May 2023, little changed in recent months as inflation lingered above 3% and the Fed maintained its interest rates.
Mortgage rates are up from the beginning of the year and well above the 10-year median.
Existing home sales have tumbled as mortgage rates have risen and fewer homes are on the market.
Accuracy
No Contradictions at Time
Of
Publication
Deception
(100%)
None Found At Time Of
Publication
Fallacies
(85%)
The article contains several informal fallacies and a dichotomous depiction. The author sets up a false dichotomy between the conflicting directions of the employment numbers, implying that either job growth or the unemployment rate must be incorrect. This is not necessarily true, as these two figures can coexist and both provide valuable information about the labor market. Additionally, throughout the article, there are several instances of emotional language and inflammatory rhetoric used to describe economic data points (e.g., 'big numbers', 'hard to miss', 'psychological impact'). These fallacies do not significantly detract from the overall quality of the article but reduce its score.
Which begs the question: What will Fed chief Jerome Powell and the rest of the Fed’s policymaking committee make this week of the apparently conflicting directions of the two employment numbers?
The May report from the Bureau of Labor Statistics also showed the unemployment rate edged up to 4% for the first time in more than two years. That ended the best sub-4% run since the height of U.S. military involvement in Vietnam.
It’s not the Fed’s preferred view of inflation, but...
