Indices opened strong this morning with the Dow and S&P making runs at their all-time highs from earlier in the month.  The Nasdaq and Russell also look strong, but they will have a bit more ground to make up before they can say the same.  Inflation fears have market participants worried about the Fed beginning to taper.  We’re seeing more Fed participants suggesting current conditions warrant a conversation on the topic, but Jerome Powell doesn’t seem to be there just yet.  He has said in the past that he doesn’t have an issue with letting inflation run a bit hot for a while to compensate for all the time we spent below their target.  Today’s PCE reading (Fed’s favorite inflation measure) was the highest in nearly 30 years.  Perhaps that will get him to move off his “transitory” stance at the FOMC meeting in two and a half weeks. 

Personal incomes saw the biggest month over month drop ever.  Combine that with inflation, and it seems like grounds for…  more stimulus!  In fact, President Biden will be releasing more details on his proposed $6 trillion dollar budget at some point today.  That figure would represent the largest budget increase since World War II. 

Equity futures will trade Sunday night and until noon on Monday.  I hope everyone has a wonderful Memorial Day weekend. 

E-mini S&P 500 Jun ’21 Daily Chart
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Bill Dixon

Senior Market Strategist
Bill began his career working with a firm of technical commodity traders specializing in the treasury and metal markets. In 2006 he moved over to Lind-Waldock as a broker. Bill joined RJO Futures in 2011.
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