Do the Fundamentals and Technicals Now Align in the US Stock Market?

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Hi.  Peter Navarro here with this week’s market and economy wrap for the week ending December 22, 2023.  The S&P 500 continued its hot streak with a modest gain.  Except for an absolutely weird options expiration day on Wednesday which led to a massive one-day pullback, the week offered few other surprises.

On the economic indicator front, the Federal Reserve’s favorite inflation indicator, the PCE Index, fell for the first time in 2020 and provided further evidence that inflation and price pressures are continuing to cool.  On an annualized basis, the core rate decelerated from 3.4 percent to 3.2 percent; and this month’s inflation reduction came in right at expectations so the market underwent little change on Friday’s news.

The Wall Street betting money continues to be on a reduction in interest rates, but after getting out on their skis last week in talking about such possible rate reductions, a gaggle of Federal Reserve officials tried to walk the whole thing back.  Good luck with that.

The broader context for all of this ...

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