Bonds & Stocks
Stocks started the week on a positive note, with traders waiting to hear from a raft of Federal Reserve speakers for clues on the outlook for interest rates. The S&P 500 topped its average price of the past 50 days — a level seen by some as key in maintaining the positive momentum. In a thin week of economic data, investors will be watching the Fed’s Senior Loan Officer Opinion Survey.
Economy
We’ve said Fed Chair Jerome Powell’s dovish pivot in December played a key role in lifting economic activity and inflation so far this year — and that to get back on track, Powell needs to make a hawkish pivot. That didn’t happen at the May 1 FOMC meeting: If anything, our monetary policy surprise model would say Powell added even more to the dovish impulse.
World
President Vladimir Putin ordered Russia’s military to carry out combat drills involving tactical nuclear weapons, the day before his inauguration for a fifth term in power. The army will carry out exercises in southern Russia to “practice the preparation and use of non-strategic nuclear weapons,” the Defense Ministry said in a Telegram statement on Monday.