Equity markets rebounded last week following better-than-expected commentary from Fed Chief Jerome Powell. The FOMC hiked interest rates by only 75 basis points and indicated the pace of interest rate hikes could slow over the next two meetings. The bad news is the PCE index belied that sentiment by rising to the highest level in 30 years as the pace of consumer level inflation accelerates. The takeaway is that near-term headwinds are priced into the market but long-term headwinds are still present and getting stronger.

Next week will be another hurdle for the market in regard to both the economic data and the earnings. The economic data include several key reads but topping the list is the Non-Farm Payroll report. The NFP report is expected to show a slowdown in the pace of hiring and wages which is mixed news indeed. As for earnings, reports from another 20% to 30% of the S&P 500 are expected over the next 5 days.