The New York Fed’s latest survey showed one-year inflation expectations declined by 0.2%, while longer-term expectations held steady. Similar to the Fed's latest meeting minutes, the survey revealed a wide range of opinions on the inflation outlook.
In the same report, earnings growth expectations ticked down by 0.2%, now sitting at 2.5%. Despite this, the perceived risk of job loss in the next 12 months actually declined—a sign of ongoing strength in the labor market.
🧱 Labor Market: Still Resilient
- Non-farm payrolls remain healthy
- Jobless claims have been trending lower in recent weeks
In the Fed's minutes, a few members indicated that a rate cut could be on the table as early as July, while others see no cuts at all this year. Personally, I welcome the diversity of opinion—it reflects the high level of uncertainty we face right now.
🔍 Key Events This Week
Here's what we’re watching:
- Tuesday: CPI (Consumer Price Index)
- Wednesday: PPI (Producer Price Index)
- Thursday: Retail Sales & Jobless Claims
- Earnings Season Kickoff: Q2 begins
📉 Inflation & Retail Sales Expectations
- CPI Core YoY is expected to rise slightly to 2.9%
- Retail Sales are expected to return to positive after a weak reading last month
I’m particularly interested to see how retail data sets the tone for Q2 earnings season.
💼 Q2 Earnings Snapshot
While earnings growth is expected to decelerate from Q1, analysts still forecast:
- 📊5.0% YoY earnings growth
- 💰4.2% revenue growth
- 📉Net margins expected to dip by 0.3% QoQ
We should begin seeing the early impact of AI investment spending in coming quarters, particularly in tech and adjacent sectors.
🧭 Market Outlook: Constructive, But Cautious
Overall, we believe the market backdrop remains constructive. That said, sentiment is getting stretched, and there are signs of complacency.
With momentum indicators in overbought territory, the likelihood of a short-term pullback in late July or early August is growing.
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Stay informed, stay balanced.
— HPK Provident Advisors
This content is for informational purposes only and is not intended as personalized investment advice. All performance referenced is historical and not a guarantee of future results. Indices are unmanaged and cannot be invested into directly. Economic forecasts may not develop as predicted.