Week Ahead: The Fed Could Pause Hikes for First Time in More Than a Year

PLUS: Earnings from ORCL, LEN, ADBE, and KR [Image]( Monday, June 12, 2023 Dow Jones | 33,876 | +0.13% S&P 500 | 4,298 | +0.11% Nasdaq | 13,259 | +0.16%   MARKET MINUTE   Good morning and happy Monday. I hope everyone had a great weekend, because we have a lot going on this week. This Wednesday the Fed Open Market Committee (FOMC) may decide, for the first time since it began this rate-hiking cycle in March 2022, to pause increases. The Consumer Price Index (CPI) and retail sales releases this week will us a better idea of what we're spending on and how much we're spending; there were signs last week that consumers are beginning to to soften up, which would have ripple effects across the economy. And, while we are at the tail end of earnings season right now, we do have some big names this week. Oracle Corp. (ORCL) reports Monday, homebuilder Lennar Corp. (LEN) on Wednesday, and software and retail players Adobe Inc. (ADBE) and Kroger Co. (KR) will report earnings on Thursday. Artificial Intelligence and Earnings Don’t be surprised if you hear "AI!" a couple of dozen times this week. Oracle has been pushing into AI and just invested in Nvidia Corp. (NVDA)-backed Cohere, a generative AI platform that will help bring AI tools into Oracle’s cloud products. Adobe will also likely talk a lot about AI. Firefly, its generative AI image tool, has been making the rounds. [Check out this short video on its capabilities]( and you won’t be surprised why Adobe is talking it up. A Week of Economic Data Many Federal Reserve officials are looking readier than ever to take a breather after more than a year of driving up interest rates. That's a move they may well make, but, if they do, it'll likely be accompanied by a strong signal or statement that they're prepared keep hiking if needed. This likely won’t come as a surprise to investors; we've been bombarded by highly mixed economic data over the last few weeks, with signs of strength and weakness in the economy. Any pause will still have a hawkish undertone and give the Fed the cover it wants (or needs, say) to hike rates at its next meeting if needs be. The only data point with the heft to change the Fed’s "pause" decision would be CPI, which comes in on Tuesday. If this number comes in hot, the market could quickly reprice from a rate hike. And, for all the talk and expectation of a pause, a hike wouldn't be crazy, given recent hikes from the Reserve Bank of Australia and Bank of Canada. We’ll also see retail sales out on Thursday. If [recent retail earnings are any indication]( we could see a slowdown. A forward-looking alternative data set on corrugated-box shipments has already flagged a significant softening in demand ahead, and that number is typically a "correlated datapoint" for retail sales; in other words, if one shows weakness, it's likely the other will as well.   Get More Money Morning Our experts offer special actionable investing and trading research to their subscribers every week [Subscribe Now]( [Image]( You are receiving this e-mail at {EMAIL}, as part of your subscription to Money Morning. To remove your email from this list: [unsubscribe here](. To cancel, or for any other questions or requests, please contact our Customer Service team: Online: [Customer Service Form]( Phone: 888-384-8339 (North America) 443-353-4519 (International) Mail: Money Morning | Attn: Member Services | 1125 N Charles Street | Baltimore, MD 21201 Fax: 410-622-3050 Our Customer Service team is available Monday ­ Friday between 9:00 AM and 5:00 PM ET. © 2023 Money Morning LIVE. All Rights Reserved. Nothing in this email should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Protected by copyright laws of the United States and international treaties. This Newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of: Money Map Press. 1125 N Charles Street, Baltimore, MD 21201. [Website]( | [Privacy Policy]( | [Terms & Conditions]( [Twitter]( [Youtube]( [Discord]( [Instagram]( [Tiktok](