The start of summer will bring a relative lull next week as investors look to record gains in major stock indexes and the first signs of a slowdown in a stunning tech-led rally.
Earnings season is also quiet, but major stocks such as Nike (NKE), Walgreens (WBA), FedEx (FDX), and General Mills (GIS) are scheduled to report earnings next week.
But an important economic indicator is looming: The Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index (PCE), is due out on Friday.
The PCE reading follows another inflation measure, the Consumer Price Index (CPI), which showed earlier this month that consumer price inflation slowed in May. If Friday’s PCE reading also points to slowing price pressures, it could give the Federal Reserve another reason to cut interest rates in the coming months.
Market expectations are currently that the central bank will cut interest rates starting in September, and a strong PCE reading would likely bolster that expectation, but if inflation shows signs of persistence, expectations of an initial rate cut are likely to fade.
The US presidential election is also on the horizon. Investors will get their first look at the presidential debate on Thursday night when Joe Biden and Donald Trump face off on CNN. How the candidates view taxation, global trade, the role of the Federal Reserve and other economic issues will be of major interest to many viewers.
Yahoo Finance’s Brent Sanchez has a chart summarizing what to watch next week.
