Equity markets face a tough week with both the PCE Price Index due out on Friday and the outlook for earnings growth in deterioration. The latest word from Factset is the consensus estimates for all 4 quarters are trending lower, the 1st half of the year will see negative growth and the outlook for the back half has accelerated its decline. This is a dead weight for the market and the primary reason why the S&P 500 is unlikely to move higher or even remain as high as it is.

Regarding the PCE Price index? The PCE price index is the Fed's favored tool for measuring consumer-level inflation and will be hot. The CPI data foreshadows not only hot YOY inflation but an acceleration of inflation near-term that has 50 basis point rate hikes back on the table. If the data is even hotter than the CPI suggested the market sell-off could begin this week, it could be sharp and severe.