New Month, Same Market?

Bear market

getty

Key Takeaways

Although May is now officially in the rear view mirror and we’re moving into the summer months, the same worries plaguing markets continue to persist. Inflation, geopolitical tensions and questions as to whether the economy is slipping into recession remain.

Investors looking for signs of optimism were given good news last night when both Salesforce and HP reported numbers exceeding expectations and offered optimistic forward-looking guidance. That news may suggest business spending remains strong and would counter fears of an imminent recession.

As we get into the second half of the week, the pace of economic data being released will pick up with today’s release of the Fed’s Beige Book and then the all important jobs number on Friday.

Squeezed between today and Friday will be Thursday’s OPEC meeting. On Tuesday, crude oil futures closed at $115.86 as geopolitical tensions and an embargo on Russian oil continue putting pressure on prices. At the same time, as China emerges from lockdowns, oil demand will increase, further pressuring prices higher.

Right now, retail investors are in a wait and see mode. With earnings largely behind us, the economic data this week is the main focus. Volatility, though down from recent highs, remains elevated with the VIX currently over 26. That suggests continued choppy trading in the short term and investors would do well to not get too caught up in the day-to-day gyrations.

tastytrade, Inc. commentary for educational purposes only.