Stocks closed mixed on Friday, but all of the major indexes finished up for the week. That makes it 1 week in a row for the Dow and the small-cap Russell 2000; 2 weeks in a row for the mid-cap S&P 400; and 3 weeks in a row for the S&P 500 and Nasdaq.

AI darling NVIDIA finally put in a down week (courtesy of the last two days of trading last week). But that comes after 8 up weeks in a row. In fact, of the 25 weeks so far in 2024, NVIDIA was up in 20 of them for a YTD gain of more than 155%.

Friday's PMI Composite report showed the Composite Index at 54.6, up from last month's 54.5. The Manufacturing Index was up at 51.7 vs. last month's 51.3 and views for 51.0. And the Services Index came in at 55.1 vs. last month's 54.8 and estimates for 53.7.

Existing Home Sales rose to 4.11 million units (annualized) vs. last month's 4.14M and estimates for 4.10M. That was a -0.7% m/m change vs. last month's -1.9% pace. Although, on a y/y basis it's down -2.8% vs. last month's -1.9% annual change.

And the Leading Indicators report improved a bit at -0.5% m/m vs. last month's -0.6%, but missed the consensus for -0.3%.

The better-than-expected inflation reports from two weeks ago, along with the Fed's FOMC announcement (where they still expect to cut rates this year), helped ignite the recent rally.

We'll get another look at inflation later this week on Friday, 6/28, with the next Personal Consumption Expenditures (PCE) index (which is the Fed's preferred inflation gauge).

Another report showing inflation heading back down (like the previous CPI and PPI reports) should help instill confidence in the Fed. That doesn't mean they will be ready to cut at their next outing in July. But each piece of data that shows inflation on a path to get to the Fed's 2% target will ultimately lead to them cutting. Some suggest as early as September. Some think not until November. While others are speculating on December. We shall see. But it looks like 2024.

Before that, however, we'll have plenty of other reports to get thru first, including today's Dallas Fed Manufacturing Index; tomorrow's Richmond Fed Manufacturing Index, the Case-Shiller Home Price Index, and Consumer Confidence; and Wednesday's New Home Sales to name a handful.

But the main event this week will be Friday's PCE inflation report.

With one more week until the halfway mark for the year, the Dow is up 3.88%, the S&P 500 is up 14.6%, the Nasdaq is up 17.8%, the small-cap Russell 2000 is down -0.25%, and the mid-cap S&P 400 is up 5.40%.

Given the resilient economy, a strong jobs market, upward trending sales and earnings estimates, and household incomes remaining near record highs, it gives the market plenty of reason to keep moving higher.

Then add in the favorable cyclical tendency of the 4-year Presidential cycle which shows that year 4 (that's this year) is the second-best year of all four years (second only to year 3 which was last year when the market gained 24%), and it looks like there's a lot more upside to go.

See you tomorrow,