Stocks Up Yesterday, Extending Last Week's Gains Ahead Of This Morning's Inflation Report

Plus 5 Just-Added Strong Buys Stocks Up Yesterday, Extending Last Week's Gains Ahead Of This Morning's Inflation Report [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Up Yesterday, Extending Last Week's Gains Ahead Of This Morning's Inflation Report [Stocks Up Yesterday, Extending Last Week's Gains Ahead Of This Morning's Inflation Report]Image: Bigstock Stocks closed higher yesterday, extending last week's gains. There's three important data events this week. The first one is this morning's Consumer Price Index (CPI) inflation report. The last report showed inflation continuing to ease. Today's report is expected to show the same with headline inflation up 0.2% m/m, and 4.1% y/y (down from last month's 4.9%). Core inflation (ex-food & energy) is expected to come in at 0.4% m/m, and 5.3% y/y (down from last month's 5.5%). Tomorrow morning we'll get another look at inflation with the Producer Price Index (PPI) inflation report. And tomorrow afternoon the Fed concludes their 2-day FOMC meeting and will announce their decision on rates. At the moment, the expectation is for the Fed to pause on rates. But there's a growing belief that they may raise another 25 basis points at the July meeting. Of course, that all depends on the data we get before then. Nonetheless, the odds are currently for a pause tomorrow. But it's anybody's guess what they'll allude to for July and after. And that's what everybody will be waiting for. In the meantime, the market has been on a tear. All of the major indexes have officially exited their bear market and have started a new bull. The last one to join the party was the S&P 500. They just exited their bear market last week when they closed up by 20% from their bear market low close. Since then, they are already up 1.08% in their new bull market. One of the key signs that a breakout was coming was watching last week's impressive moves from the small-cap and mid-cap indexes, along with the equal-weighted S&P 500 index (which is different than the market-weighted S&P 500 which has been powered higher by the top 10 largest stocks this year). The rally in these, which had been lagging, showed that the breadth of the market rally was finally widening. And that was a bullish sign. I would not be surprised to see some volatility this week. But the market is clearly sending signals that it is comfortable with the current outlook. And if we see any pullbacks, I would be looking to buy the dip. But if no dips come, buying strength works as well. Because it looks like there's plenty more upside to go this year. 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