Earnings, Inflation Data Highlight Winning Week

All three benchmarks are headed for weekly gains

The market had a solid week, with the S&P 500 Index (SPX) and Nasdaq Composite Index (IXIC) on track for their fourth consecutive weekly gain, while the Dow Jones Industrial Average (DJIA) eyes its second-straight weekly win. Investors unpacked a host of quarterly reports as earnings season winds down, with Nike (NKE) staging a dramatic post-earnings drop to end the week. 

Friday’s inflation data was in focus on Wall Street for many days leading up to it, and it did not disappoint. On an annual basis, the Federal Reserve’s preferred inflation gauge, the core personal consumption expenditures (PCE) price index, came in line with estimates at 2.6% compared to April’s 2.8% — its lowest rate since March 2021. For the month of May, the core index rose just 0.1% for its smallest increase in seven months. 

Electric Vehicle Buzz

Rivian Automotive (RIVN) scored a brand-new “buy” rating from Guggenheim on Tuesday, with the firm citing a “compelling catalyst path.” The following day, RIVN soared 23.2%, after the company secured up to $5 billion in funding from Volkswagen Group. 

The venture put pressure on sector peers, such as part manufacturer Aptiv (APTV), which received a downgrade after the news. On the other hand, Amazon.com (AMZN), a large investor in Rivian Automotive, received enough of a boost to pass the $2 trillion market cap for the first time on Tuesday. 

Analyst Notes This Week

To start the week, Planet Fitness (PLNT), IBM (IBM), and Anheuser-Busch (BUD) all received bull notes, becoming some of the notable market movers. Meanwhile, software stock Sea (SE) and casino stock Penn Entertainment (PENN) were both hit with downgrades, while Robinhood (HOOD) and Digital Realty Trust (DLR) were upgraded. 

July 4th Week Ahead

There is a flood of economic data next week despite holiday-shortened trading amid the Independence Day holiday. Plus, Federal Reserve Chairman Jerome Powell will give comments on Tuesday. In the meantime, Schaeffer’s Senior Quantitative Analyst Rocky White considers what a subdued Cboe Volatility Index (VIX) means for stocks, and Schaeffer’s Senior V.P. of Research Todd Salamone points out eight stocks outperforming alongside megacaps. 

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