This Data Could Test the Market’s Conviction By Larry Benedict, editor, The S&P Trader Hey traders, Larry here with your weekly update. After a very busy month, we had just one trade during last week’s shortened trading period. That trade banked us $1.00 (or $100 per contract) for the week. So we’re nearly back to square with our rolling year-to-date (YTD) now sitting at -$0.98 (or $98 per contract). Although it was a quiet week, it doesn’t mean that things will remain quiet for long… A standout of last week’s economic releases was durable goods orders for February. They rose 1.4% month-over-month (MoM). That was 0.3% higher than forecast and came after a massive 6.9% drop in January. That stronger economic news carried over into the start of this week. Yesterday, the Institute for Supply Management (ISM) manufacturing purchasing managers’ index (PMI) for March came in at 50.3. That beat market expectations of 48.4 (and was up from 47.8 in February). Manufacturing activity is finally expanding, albeit in a small way. It was the first time that manufacturing data has been positive since September 2022. Additionally, data on Friday showed that personal consumption expenditures (PCE) inflation was 2.5% for February. That is nearing the Fed’s expectations. And the market will soon see new economic data due out this week… and how that could flow into the Fed’s interest rate deliberations. The market is still factoring in the first rate cut in June. Yet its conviction will wane if we see a continuation of this recent strong economic data. As Chair Powell said last Friday, the Fed isn’t in any hurry to cut rates… ISM Services PMI data is due out tomorrow. And Fed Chair Powell is also due to speak. So the market will be watching this week’s developments closely. I wrote about how the Fed was increasing its focus on the jobs market, in particular the unemployment rate, in your update last week. Today, we have Job Openings and Labor Turnover Survey (JOLTS). At writing, the market expects a slight fall from January’s 8.863 million (down to 8.84 million). And on Friday we have the all-important nonfarm payrolls (NFP) and the latest unemployment rate. If NFP comes in well above expectations (like the previous read) and unemployment remains steady at under 4%, that could add further weight to the argument for rate cut delays. And don’t forget that this is all happening after a super strong quarter for the S&P 500 (SPX). Interest rate cut expectations have fueled this action. It is currently trading again at record all-time highs. The slightest jolt or unexpected piece of economic data right now could set off a big swing in the market. It’s all adding up to another busy period ahead. Now a look at our trade this past week… 
(Click here to expand image) As I mentioned, we had just one trade this week, which generated $1.00 (or $100 per contract) in premium. Please keep an eye out for my next trade. I’ll send it as soon as I see the right setup. And don’t forget that if you have any questions, you can send them to feedback@opportunistictrader.com. I’m always glad to interact with readers. Regards, Larry Benedict
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