Clues for Next Stock Breakout

NYSE: SPY | SPDR S&P 500 ETF Trust News, Ratings, and Charts

SPY – It is abundantly clear that the main catalyst for the next big rally to push the S&P 500 (SPY) to new highs will be the cutting of rates by the Fed. And that is why the announcement of every major economic report says something about inflation…and the likelihood of that rate cut. So let’s review the upcoming economic calendar to prepare ourselves to trade the outcome effectively. Read on for more…

I have written numerous commentaries in recent months pointing out that stocks should pull back from the highs. That’s because the economy is too strong…inflation is too high…and therefore it will take longer for the Fed to cut rates.

If you focus on the S&P 500 (SPY) or the NASDAQ it looks like my prediction is wrong. However, if you look at the recent losses for most other indices, including the Russell 2000 in negative territory on the year, then you can see that I am actually right.

This creates a confusing time for investors where each next economic report could hold the key to bolt higher or tumble lower. So, let’s review the upcoming economic calendar and do our best to prepare for these vital announcements.

Market Commentary

So far in June we have seen stronger than expected economic data. Mixed inflation data. And clear statements from the Fed that the 3 rate cuts previously expected is now down to only 1 (and several of the Fed participants predict zero cuts this year).

This created a “Flight to Safety” trade which these days = buy Magnificent 7 stocks.

That is why the S&P 500 dominated by these stocks hit new records while most other indices fell. Meaning the average investor is seeing losses in June with the gains of the S&P 500 being an appealing, but elusive mirage.

What happens next has a lot to do with the next round of economic data and what it tells us about inflation and possibility of rate cuts this year. So, let’s review what is on the menu in the weeks ahead:

6/28 PCE Price Index: As most of you probably know, this is the Fed’s preferred inflation gauge and not the more frequently discussed CPI report. The core reading is predicted to keep cooling with estimates 0.1 to 0.2% below the previous print of 2.8% year over year. This includes a very modest 0.1% month over month increase. Matching these estimates would be a positive for stocks. And conversely, coming in above these readings could kick off a broad pullback.

7/1 ISM Manufacturing: This has been the weak link of the economy for more than a year with services doing most of the heavy lifting. However, the PMI Flash report from last week showed a nice bump in manufacturing activity that could be on display here which is why the estimate for this report stands at 51 vs. 48.7 last month. Investors normally celebrate stronger than expected economic readings…but not when lowering inflation and Fed rate cuts are their primary goal. So, this report would be better towards 50 than the 51 predicted.

7/3 ISM Services: This came in at a fairly growthy 53.8 last time and the PMI Flash report points to something similar on the way. Once again, coming in a notch lower would be better given the primary focus on taming inflation to produce future rate cuts.

7/3 FOMC Minutes: Often this report is a non-event. And sometimes there are interesting clues of the Fed intentions unveiled. My guess is that investors continue to not appreciate the patient resolve of the Fed to keep rates aloft. So I think there is a tad more risk of hawkish details emerging that would have bond rates on the rise and stocks going the other way.

7/5 Government Employment Situation & Average Hourly Earnings: Most signs point to healthy job additions. I think the real key continues to lie in the Average Hourly Earnings component (aka Wage Inflation) which has been far too high…and far too sticky. I assure you Fed officials will be watching this reading closely. Thus, we should be too with hopes that it heads under 4% year over year with the monthly pace closer to +0.2%.

7/11 Consumer Price Index (CPI): Even though the aforementioned PCE report on 6/28 holds a lot more sway with Fed officials, CPI has proven to be a market moving report each month. Plain and simple, we want to see this get closer to 3% on this report and hopefully crack under in August.

These events could have a wide array of outcomes from gung ho bullish to neutral to triggering a pullback or correction like we saw in April. Given that we are in the midst of a long term bull market, then best to assume neutral to bullish in your investment strategy.

Meaning that betting on stock market losses in the midst of a bull market is typically foolish and financially painful. So best to keep your eyes on the long term horizon with the best stocks to excel in the months ahead.

You know what I am going to say next. That those best stocks are found much more easily with emphasis on our POWR Ratings. My favorite of those POWR Ratings stocks are discussed below…

What To Do Next?

Discover my current portfolio of 11 stocks packed to the brim with the outperforming benefits found in our exclusive POWR Ratings model. (Nearly 4X better than the S&P 500 going back to 1999)

Plus 2 specialty ETFs that are benefiting from some of the hottest investment trends.

These hand selected picks are all based on my 44 years of investing experience seeing bull markets…bear markets…and everything between.

If you are curious to learn more, and want to see these lucky 13 trades, then please click the link below to get started now.

Steve Reitmeister’s Trading Plan & Top Picks >

Wishing you a world of investment success!


Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
CEO, StockNews.com and Editor, Reitmeister Total Return


SPY shares rose $1.94 (+0.36%) in premarket trading Friday. Year-to-date, SPY has gained 15.68%, versus a % rise in the benchmark S&P 500 index during the same period.


About the Author: Steve Reitmeister


Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
SPYGet RatingGet RatingGet Rating
.INXGet RatingGet RatingGet Rating
DIAGet RatingGet RatingGet Rating
IWMGet RatingGet RatingGet Rating
QQQGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Investor Alert: Load Up on Small Cap Stocks!

Large caps time in the sun is now over and thus no shock that the S&P 500 (SPY) pulled back from recent highs. It is time for small caps to shine which was clear in their nearly 4% gain Thursday even as the Magnificent 7 was bathed in red. Why is this happening? What comes next? And what are the best stocks to own now? The answers to all that and more are shared in the commentary below...

Is Meta Platforms (META) a Buy Before Its Next Earnings Release?

Meta Platforms (META) reported better-than-expected earnings for the first quarter and is well-poised to maintain its momentum, driven by solid advertising business, continued advancements in AI, and strategic investments. Should you consider buying this stock before its upcoming earnings release on July 31? Read more…

3 Value Stocks With Dividend Yields Above 4%

Value stocks tend to perform well during economic recoveries and periods of market volatility, making them a good option for long-term investors seeking stability and growth. Additionally, these stocks often pay dividends, offering an additional income stream. Hence, fundamentally solid value stocks Enterprise Products (EPD), Energy Transfer (ET), and Organon (OGN) having dividend yield above 4% could be ideal buys. Read more...

3 Cybersecurity Stocks With Upbeat Q2 Earnings Outlook

The cybersecurity sector is well-positioned for strong growth due to increased digitization, cloud adoption, rising cyber threats, and regulatory efforts. Therefore, investors should consider buying robust cybersecurity stocks like Tenable Holdings (TENB), Clear Secure (YOU), and Radware (RDWR) with an upbeat Q2 earnings outlook. Read more...

Is it Time to Buy Small Cap Stocks?

The S&P 500 (SPY) making new record highs is the big headline these days. Unfortunately the small print tells you that the rest of the market is not coming along for the ride. However, Steve Reitmeister sees its time to flip the script and for small caps to finally take the lead. Why is that? When is that? And which are the best small caps? You will find the answers by reading on below...

Read More Stories

More SPDR S&P 500 ETF Trust (SPY) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All SPY News