Even though stocks could set new records in the coming week, investors will be confronted with fresh data which could reveal the greatest year-overyear rise in consumer inflation since more than thirty years.

After a week of record stock levels, Friday’s close was dominated by the Federal Reserve’s announcement about ending its bond purchases, which marked the end to the Federal Reserve’s easing efforts in fighting the pandemic.

The S&P 500Gained 2% during the week. Record 4,697 It was the Dow,Also, the number of people who have reached this new peak has increased 1.4% to 36.327 and they also had a rise in their overall popularity. NasdaqRecord 15,971 was reached, an increase of 3%.

“The important drivers of the market, I think, remain intact — earnings and interest rates,” said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management. “I believe that the Fed gave to the equity market the right thing…which was an awareness of inflation and not an excessive reaction to it. We are still trying to digest what has been a very strong earnings season.”

By the middle next year, the Fed will have ceased its $120 billion per month bond purchase program. Some economists predict that the central bank will raise interest rates at this point. Jerome Powell, Fed chairman, assured the markets that inflation is temporary but that the Fed will act if the situation becomes more serious.

Investors seem to be giving the green light for the equity market, at least in short-term. It’s difficult to disagree with. David Donabedian (chief investment officer at CIBC Private Wealth Management) said that we have greater concerns when taking a 6-month perspective.

He said that inflation is the biggest worry, which is something we do not believe is temporary. “I’d expect to see a rate rise almost immediately after tapering is complete, which would be mid-2022.”

Donabedian stated that the Fed should be concerned about sticky inflation because it could lead to higher interest rates in an effort to combat rising prices.

Reports Tuesday and Wednesday will show the consumer and producer price indexes. Both reports are expected to be elevated in October according to economists. Dow Jones predicts that the headline PPI will rise by 0.6%.

CPI is likely to show the most dramatic post-pandemic increase. CPI headline inflation is forecast to increase by 0.6% or 5.9% per year, which would be the fastest pace of change since December 1990. It is predicted that core inflation will rise by 4.3%, which excludes energy and food.

“The rapid acceleration in shelter cost is astonishing so, if that’s combined with rising energy prices, we could see an increase of 5.7% [headline gain]Diane Swonk (chief economist, Grant Thornton), said that it is possible.

Interactive Brokers’ chief strategist Steve Sosnick stated that the markets have already begun to anticipate higher inflation.

Markets have tunnel vision right now. “Easy money will be available for some time, and although the Fed said they aren’t refilling their punch bowl, it is likely that the party will keep going for quite some while,” he stated. The path of least resistance appears to be the best right now.

Fed officials are not on the same page

The week will be highlighted by central bank speakers, including Fed Chairman Jerome Powell speaking at two events. Tuesday will see him at a Fed conference about gender and economics. On Tuesday, he speaks at the virtual conference “Diversity and Inclusion in Economics, Finance, and Central Banking”, co-hosted jointly by the Federal Reserve Board and Bank of Canada.

Many other Fed officials are also expected to speak, including Fed Vice Chair Richard Clarida (New York Fed President John Williams), Fed President Mary Daly (San Francisco Fed President Mary Daly) and Fed Vice Chairman Richard Clarida (Fed Vice Chairman).

Donabedian, CIBC said that the speakers group could be valuable and important. It will also be crucial to hear their perspectives on rising prices. There are many different views on inflation. It won’t look like an FOMC feud, but it will appear like the members aren’t on the same page about inflation,” he stated.

Investors will keep an eye out for progress in Congress on the Biden spending bill, which has come under fire from the Senate.

Donabedian stated that it looked like the House would vote on both the big fiscal package. Donabedian stated that he expected the House to approve both and that the bill on infrastructure should be made law.

He stated that it does not indicate whether Senate will want major changes to the Social Spending Bill, but that there is a possibility that this flops, noting that the chance of failure is less than 50%.

Although the earnings season has ended, there is still plenty of information to be seen in the next week. This includes The Walt Disney Company’s Wednesday report.

Week ahead calendar

Monday

EarningsSoftbank, Virgin Galactic Zynga, PayPal, Trip Advisor, AMC Entertainment,Cabot Lemonade, Marriott Vacations,US Foods RobloxTencent Music

9:00 AM Fed Vice Chairman Richard H. Clarida 

10:00 a.m. Boston Fed President Kenneth Montgomery

11:00 a.m. Fed Chair Jerome Powell speaks at Fed conference on Gender and Economy

10.55 AM New York Fed President John Williams

12:00 p.m. Fed Governor Michelle Bowman

12:01 p.m. Philadelphia Fed President Patrick Harker

Charles Evans, President of Chicago Fed at 1:50 PM

Survey of senior loan officers at 2:20 p.m.

Tuesday

Earnings DR Horton Coinbase, Palantir, Aurora Cannabis, Bayer, Krispy Kreme, DoorDashCardinal Health. BioNTech. Poshmark. Unity Software.

6:00 a.m. NFIB survey

7:50 a.m. St. Louis Fed President James Bullard

8:30 a.m.

9:00 AM: Fed Chairman Powell speaks at the Conference on Diversity and Integration in Economics, Finance, And Central Banking. This conference was hosted by the Federal Reserve Board and Bank of Canada.

11.35 AM San Francisco Fed President Mary Daly

Minneapolis Fed President Neel Kazhkari

Wednesday

Earnings Walt Disney Beyond Meat, Adidas, Wendy’s, Bumble, Energizer, Beazer HomesAllianz. Tencent Holdings. Affirm Holdings. Frontier Group, Kinross Gold

8:30 AM 8.30 a.m. Initial jobless claims

9:00 a.m.

9:00 a.m. Wholesale Trade

2:00 p.m. Federal budget

Thursday

Earnings Brookfield Asset ManagementSiemens Tapestry,Burberry, Lordstown Motors and Edgewell Personal Care

Veterans Day

The bond market is closed

Friday

Earnings AstraZeneca

10:00 a.m. Consumer sentiment

10:00 AM JOLTS

12.10 pm New York Fed’s John Williams