This week ahead || Jun 12th - Jun 16th 2023
Here's some key news for the week ahead.
Inflation and the Fed: What to know this week
This week, investors will closely monitor inflation data and the Federal Reserve's monetary policy decision. The Consumer Price Index (CPI) for May will be released just before the Fed's Federal Open Market Committee (FOMC) meeting. Expectations are that the FOMC will announce a pause in rate hikes, but this outlook could change based on the inflation reading. Other economic data includes retail sales for May and consumer sentiment. The S&P 500 entered bull market territory, with stocks experiencing modest gains. Wall Street expects a decrease in the headline CPI, while core inflation is forecasted to slow down. The CPI report will be significant for the Fed's decision-making process. The market has shown mixed reactions and uncertainty regarding the Fed's next move. The interest rate decision will be accompanied by an updated Summary of Economic Projections. Recent data suggests a longer-term shift in the Fed's outlook, and some economists anticipate an interest rate hike in July. Investors will also pay attention to earnings reports from Oracle, Adobe, Kroger, and Lennar. Overall, market sentiment seems positive, and there is a belief that the bull market will continue.
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Cryptocurrency Crumble: Bitcoin Falls, Smaller Digital Coins Plunge In Wake Of SEC Crackdown
Bitcoin and various small digital coins, including Solana, Cardano, and Dogecoin, experienced significant price declines following a regulatory crackdown by the SEC on cryptocurrency exchanges. Bitcoin dropped to $25,501, approaching its lowest levels since March, while smaller tokens reached lows not seen since 2003 or worse. The SEC filed charges against Binance and its co-founder for securities violations, targeted Coinbase for allegedly operating as an unregistered securities exchange, and named Cardano and Solana as unregistered securities. This news led to a decline in cryptocurrency prices, including a 17.5% drop in Coinbase's stock. Concerns about the SEC's regulatory actions and liquidity drying up, particularly for smaller digital coins, may have contributed to the market downturn. Ethereum, Cardano, and Dogecoin also experienced significant declines in value.
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Top 5 things to watch in markets in the week ahead
This week is set to be significant in the markets, with key events and data releases shaping investor sentiment. The Federal Reserve is expected to keep interest rates unchanged at its policy meeting on Wednesday, but the focus will be on the "dot plot" outlining future tightening expectations. Mixed economic data, including moderating inflation and strong job growth, has complicated the Fed's decision-making. Tuesday's U.S. inflation report will be closely watched for signs of the Fed's impact on cooling inflation without harming growth. The European Central Bank (ECB) is likely to raise rates, diverging from the Fed, while the Bank of Japan is expected to maintain its ultra-easy policy. Additionally, China's data on new home prices, unemployment, industrial production, and retail sales will be released, potentially influencing stimulus expectations. Despite concerns, U.S. stocks have performed well, supported by a megacap stocks rally, better-than-expected earnings, and the belief that the Fed is nearing the end of its rate-hiking cycle.
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This week in tech: A tepid response to Apple's Vision Pro; SEC vs. Coinbase
Wall Street showed a cautious response to Apple's launch of its mixed reality headset, Vision Pro, with analysts noting the high price and lack of clear consumer appeal. Coinbase faced a significant setback as it was sued by the SEC for alleged securities rule breaches, leading to a drop in its stock price. General Motors announced plans to integrate Tesla's charging network connector into its electric vehicles, following a similar collaboration between Ford and Tesla. Amazon is reportedly planning to launch an ad-supported tier for its Prime Video streaming service, following the trend set by competitors like Netflix and Disney. Netflix saw a surge in new subscribers after implementing measures to crack down on password sharing.
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