Not only will investors have a full plate of earnings reports to grapple with this week, but they will also have a huge week of economic data such as CPI, PPI, and retail sales, keeping them guessing and uncertain.  Although the DIA seems stuck in consolidation, the SPY, QQQ, and IWM remain in bullish patterns.  Big point index swings are possible this week, and I would not rule out significant intraday whips or overnight reversals to challenge us in the week ahead.  All eyes will be on Tuesday morning’s BLS sessional adjustments to the CPI number, so plan your risk carefully as we wait.

Asian markets started the week mostly lower with a volatile yen as uncertainty increases on the BOJ nomination report.  However, European markets trade with modest bullishness this morning, trying to gauge monetary policy ahead of crucial economic data.  While off overnight lows, U.S. futures suggest a flat, mixed open as they wait on a market-moving CPI report Tuesday morning.

Economic Calendar

Earnings Calendar

Notable earnings include AAP, AMKR, ANGI, CAR, CDNS, CHKP, DENN, FE, IAC, MEDP, OTTR, PLTR< SEDG, & VNO.

News & Technicals’

According to NBC News, the U.S. military shot down a fourth unidentified object Sunday and expects to recover it.  The White House on Friday announced a second object had been shot down over Alaska, and Canadian Prime Minister Justin Trudeau said Saturday a U.S. fighter jet shot down a third “unidentified object.”  Officials have yet to release details about the objects that were downed on Friday, Saturday, and Sunday. 

U.K. semiconductor bosses are pleading with the government for subsidies amid fears that some chip firms will be forced to move overseas.  The U.S. and EU have announced multibillion-dollar packages to boost domestic chip production, and industry executives worry that the lack of a similar strategy from the U.K. is harming the country’s competitiveness.  Prime Minister Rishi Sunak’s administration is under pressure to publish its planned chip strategy, which has faced delays due to political instability.

Life Insurance Corporation, India’s largest insurer, said it ‘might’ review its stake in the embattled Adani Group after meeting with the management.  LIC chairman M.R. Kumar said the state-owned insurer plans to discuss with the Adani management soon to get a better picture of the crisis engulfing the conglomerate.  “As an investor, it’s not often that we have this kind of a situation.  But then we have reached out to the management of Adani,” Kumar told CNBC’s Tanvir Gill in an interview.

The modest profit-taking of last week underscores the uncertainty investors face this week we readings on CPI, PPI, and Retail Sales numbers.  Nevertheless, having relieved much of the overbought condition, the SPY, QQQ, and IWM remain in bullish patterns, with the DIA seminally stuck in consolidation.  The seasonal adjustments from the BLS will have all eyes on the Tuesday CPI report setting up a morning of considerable price volatility.  However, as we wait, don’t be surprised to see a  choppy, low-volume price action today.  All the economic data will, of course, be complicated with another big of economic data to keep traders guessing and emotions high.  Plan carefully and prepare for some big point index swings with the possibility that the overnight reversals experienced last week may continue as the data rolls out.

Trade Wisely,

Doug