Updated quantity ratings on 135 stocks

The choppy market action of the past week probably made investors feel a little queasy.

While the S&P 500 ended the week basically flat, it had both its worst and best days of the year.

On Monday, concerns that the US economy could enter a recession continued to grow. It didn’t help that overseas markets (namely Japan) had already sold off sharply. This combined to create an increase in volatility, and the S&P 500 fell 3% as a result. The Dow also lost more than a thousand points (or 2.6%), while the NASDAQ fell 3.4%.

Then on Thursday we learned that initial weekly jobless claims were lower than economists had expected. Normally the market doesn’t react strongly to this report, but in this case it went up on the news. In fact, the S&P 500 closed up 2.3%, posting its best day since 2022. The NASDAQ, meanwhile, was up nearly 2.9% and the Dow was up about 1.8%.

As I explained last week, this kind of volatility is typical for August. And this week could be particularly choppy as we have some key economic data coming out that could move the markets.

This morning saw the release of the first key economic report: July’s Producer Price Index (PPI).

The PPI rose 0.1% last month, down from a 0.2% rise in June. Economists were forecasting 0.2%. On an annual basis, the PPI rose 2.2 percent after climbing 2.7 percent in June. Stocks rose on PPI reading.

Now, the good news is that today’s PPI numbers suggest that the Federal Reserve may be on track to start cutting key interest rates in September. As a result, the broader market has rebounded. The NASDAQ led the higher charge, climbing 2.4 percent, while the S&P 500 gained 1.7 percent and the Dow rose 1 percent.

Tomorrow, we’ll take a fresh look at the Consumer Price Index (CPI). Economists expect a 0.2% reading in July, or 3% from a year earlier. Core CPI, which excludes food and energy, is expected to have risen 3.2% from a year ago. This is lower than the 3.3% increase seen in June.

Finally, on Thursday, the July US retail sales report will be released. Excluding autos, US retail sales are expected to rise 0.3% in July. This would mark a sharp drop in consumer activity compared to the 0.8% sales growth we saw in June. (We’ll talk more about each of these reports on Thursday and Friday 360 Square problems.)

Hopefully this week’s economic data will give the Fed the leg it needs to cut key interest rates. The recent collapse in two-year and 10-year Treasury yields (which now stand at around 3.94% and 3.85%, respectively) means the Fed needs to cut by 1.5%, as the federal funds rate is now both far above the market. rates. The problem is that if the Fed waits until September 18 to taper, it may be too little, too late.

So there is a chance that interest rates could be cut by 0.5% ahead of the Jackson Hole Fed meeting next week. If not, I expect the central bank to cut interest rates no later than September 18. Additional cuts will give the US economy a “turbo boost” by the end of the year.

But in the meantime, folks, brace yourself for more volatility this week.