Monday's Market Minute: Inflation Looms As Earnings Season Kicks Off

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A busy schedule should keep investors and traders busy this week, and also keep speculation at heightened levels. Before we get into some of what’s due out and what could move markets, let's take a look at a couple of trends in play. First, rates are on the rise; the 10-Year Yield (TNX) is back to 1.8%, and the 30-Year-Yield (TYX) to 2.1% is starting to raise eyebrows and could pose a threat to some of the growth names that make up the tech-heavy NASDAQ-100. As a result, we saw the S&P 500 have its worst start to the year since 2016.

Goldman Sachs also is making headlines to begin the week for their expectation of four rate hikes this year, citing the recent hawkish tone in the Fed minutes and strong labor conditions as justification for why they now see the balance sheet roll-off beginning as soon as July. This week, we’ll get a look at some inflation data. We have the Consumer Price Index, the Producer Price Index, Import and Export Prices, the Beige Book, Retail Sales, comments from Jerome Powell on Tuesday, and… well, the list goes on. In terms of companies reporting quarterly results, this is the start of earnings season with Wells Fargo WFC, Citi C, and JPMorgan JPM kicking things off.

We also have Albertson’s ACI, Delta Airlines DAL, and KB Home KBH to provide further insight as to consumer spending habits into the end of last year, but next week is when things really get going. Lastly, a few markets to keep an eye on include energies, grains, and currencies. The energy futures started off the year on the move higher with WTI Crude Oil futures (/CL) rising back to the mid-80 handle, which are levels not seen since mid-November. We have soybean futures (/ZS) also bid up to levels last touched in mid-July last year and the Japanese Yen to five-year lows. So, lots to stay dialed in on this week… Hope you had your Wheaties!

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