Market Soars on CPI Data

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Alex Partida

Nov 11th 2022  .  3 min read

Market Soars on CPI Data

After yesterday provided the biggest rally in the market of 2022, it put the upside target of 4,000 on the S&P 500 futures directly in sight. One of the biggest questions for retail investors today was how much profit-taking would be seen after such an insane rally or would the rally continue.

When the opening bell sounded, indices did see some light profit-taking. The key determining factor as to whether the rally would continue was whether price would respect the 3,950 level. This level would be tested several times in the cash session before giving one last push to end the week. 

Still strong buying in names

The range of today was not as explosive as yesterday, but there was still strong buying in individual names across the board. Stocks such as Netflix (NFLX), Shopify (SHOP), and Advanced Micro Devices (AMD) all continued to rally, each one being up over 5% again today. 

The importance of these names still being bought aggressively is that it shows big money on Wall Street is not scared to keep buying into the weekend. 

One level that needs to be on every trader’s chart is 4,000 on the S&P 500 futures. This level will be the line in the sand heading into next week. 

Econ data next week

Looking into next week, there are a few notable economic events that should be taken into consideration for any trading plans.

On Tuesday, at 8:30 a.m. Eastern, The Producer Price Index (PPI) report is set to release final demand numbers. Big money on Wall Street will be looking for data to support the improvement seen in the most recent Consumer Price Index.

On Wednesday, at 8:30 a.m. Eastern, Retail sales is yet another report that Wall Street will have its eyes on. 

On Thursday, at 8:30 a.m. Eastern, the Initial Jobless Claims, and Continuing Jobless Claims Reports will release data. With the market closing at a key level, if price holds over the weekend and into Monday, it could signal a continuation rally. 

Market sentiment on pivot anticipation

Generally speaking, Wall Street is looking for data across the board to continue to be bullish to support the current market sentiment. The thing to watch for is if the market digest neutral data as a positive reaction due to a long duration of negative data. Markets are currently reacting to this data in anticipation that it will be enough for the Federal Open Market Committee (FOMC) to pivot on benchmark interest rate hikes. 

The stock market stays hot after CPI

The Nasdaq and the S&P 500 futures were positive to close the session. The S&P 500 futures closed up 0.96%, adding 38.5 points, while the Nasdaq futures closed up 1.79%, gaining 209 points. The Dow Jones futures followed, closing up 0.13%, adding 45 points.