(CTN News) – The S&P 500 (^GSPC) Inflation closed above 5,000 for the first time on Friday, as the three major averages recorded a positive week for the thirteenth consecutive week.
There have been few economic catalysts in the past week, so investors have been digesting a variety of corporate results that have been better than expected.
Additionally, Federal Reserve officials reiterated the central bank’s stance that more confidence in the downward path of inflation is necessary.
The week ahead will present new challenges to the market rally, however, as inflation and consumer spending will dominate the economic calendar. On the corporate front, approximately 15% of S&P 500 companies are scheduled to report earnings, including John Deere (DE), Coinbase (COIN), Airbnb (ABNB), and Shopify (SHOP).
Verification of prices
The Consumer Price Index (CPI) for January will be published on Tuesday morning. Wall Street expects the headline CPI, which includes food and energy costs, to increase by 2.9% on an annual basis, down from 3.4% in December. The price of goods and services is expected to rise by 0.2% on a month-over-month basis, in line with December’s increase.
The core inflation rate is expected to have increased 3.7% year-over-year, down from 3.9% in December. Prices are expected to increase by 0.3% on a monthly basis, unchanged from the previous month.
According to Morgan Stanley economist Diego Anzoategui, we expect further deflation in core goods this month due to weak used car prices. Despite the gradual deceleration, service inflation remains sticky with some deceleration in rents, but a slight rebound in insurance prices and hotel prices.”
Consumers’ Inflation state of mind
The recent emergence of a soft-landing thesis has been attributed to consistently strong consumer spending data. The Januaryretail sales report will be released on Thursday, giving investors a fresh look at that trend. Retail sales are expected to decline 0.2% in January, according to economists.