Key data – PCE and unemployment

We enter the last days of April on the verge of a three month losing streak. The last time the S&P 500 had three consecutive losing months was August through October of 2023.

The good news is we are well off the lows. In fact, if you were able to tune out the day-to-day market noise you would have no clue about the wild swings April brought us. The S&P 500 sits -1.54% away from an even month, so let’s see if we can finish the month higher.

What will be some of those catalysts to keep the rally going?

Outside of the incessant tariff discussions, we have tons of hard data to sift through as economic data and earnings come into the spotlight.

Economic Data should be the big focus this week barring any more tariff negotiation volatility – key word “should”.

Let’s focus on that data and why it’s so important.

As we head into next week’s Fed meeting, the “data-dependant” Fed gets the two biggest numbers it needs to gauge the economy and their dual mandate of lower inflation combined with low unemployment.

First up is Wednesday’s PCE data. The Personal Consumption Expenditures is known as the Fed’s preferred inflation gauge and its core reading is expected to drop to 2.6% down from 2.8%. That would mark the lowest levels since September when they began their rate cuts. This could give them real ammunition to possibly lower rates.

Then we get the second key piece of the Fed’s dual mandate in April’s unemployment report on Friday.

The numbers here also remain stuck in a narrow range, but still at historical lows. Expectations remain for a 4.2% number despite fears of recent layoffs and the impacts of DOGE. If these numbers surprise to the downside then the talk of a potential rate cut could grow louder,

Magnificent Earnings… Meta Platforms (META), Microsoft (MSFT), Apple (AAPL) and Amazon (AMZN) report this week and hope to build off their recent price momentum.

Considering we are dealing with the top market caps in the world, their price impact will move the markets. All but META are in both the Dow and S&P 500 and all four stocks are the top holdings in their specific sector ETF’s.

They all recently reached individual bear market territory and have much room to reverse to get back to old highs. Here’s a quick rundown on what to watch other than the obvious forward guidance and tariff impact.

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