Last Inflation Report Pushed Markets To Record Highs In June: Could It Happen Again Friday? 5 ETFs To Watch
Portfolio Pulse from Piero Cingari
The upcoming PCE price index report for May, scheduled for release on Friday, is expected to show a slight decrease in inflation. If the report meets or exceeds these expectations, it could bolster investor hopes for Fed rate cuts, potentially sparking a market rally. Key ETFs to watch include SPY, UUP, TLT, GLD, and IWM.
June 27, 2024 | 8:53 pm
News sentiment analysis
Sort by:
Descending
POSITIVE IMPACT
The SPDR Gold Trust (GLD) could see a positive impact if the PCE report shows lower-than-expected inflation, as this would increase expectations for Fed rate cuts, enhancing gold's appeal.
Lower inflation would likely lead to expectations of Fed rate cuts, which typically enhances the appeal of gold as a safe-haven asset.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The iShares Russell 2000 ETF (IWM) could benefit from a lower-than-expected PCE report, as small caps may gain from reduced pressure from high interest rates.
Lower inflation would likely reduce the pressure from high interest rates on small-cap stocks, which have underperformed this year.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
The SPDR S&P 500 ETF (SPY) could see a positive impact if the PCE report shows lower-than-expected inflation, as it may increase investor expectations for Fed rate cuts.
A lower-than-expected PCE report would likely lead to increased investor optimism about potential Fed rate cuts, which historically boosts the S&P 500.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) could benefit from a lower-than-expected PCE report, as it would likely push bond yields down, increasing the value of Treasury-related ETFs.
Lower inflation would likely lead to lower bond yields, which increases the value of long-dated Treasury bonds.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) may weaken if the PCE report shows lower-than-expected inflation, as this would reduce market interest rate expectations.
Lower inflation would likely lead to expectations of Fed rate cuts, which typically weakens the USD.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80