Markets look to extend the gains made last week but earnings could be a hurdle. While the bulk of S&P 500 companies are beating their consensus estimates the impacts of inflation and supply chain disruptions continue to creep into the picture. Assuming this week?s onslaught of earnings reports continues to show the same trends the S&P 500 will likely move up to set another new all-time high.

The risk this week is in inflation but not in the earnings reports. The PCE price index is due out on Friday and could spark another round of volatility. The October CPI data moderated a bit from the previous month so there is hope for the same with the PCE. The risk is that PCE prices will rise by an unexpectedly large amount and put additional pressure on the consumer. Worse, a hot read of PCE prices will bring the start of Fed tapering that much closer.