Market Rally Faces Test Next Week as Fed and Inflation Data Take Center Stage

 The stock market continues its bullish run, with the S&P 500® Index (SPX) reaching its highest close of the year, up 20% from the previous October low. However, the rally is set to face significant challenges next week as investors gear up for a Federal Reserve meeting and key inflation data.

This week, the market showed some liveliness as the SPX hit a milestone, technically marking the start of a new bull market. The previous bear market lasted a staggering 282 days, much longer than the shorter one experienced in early 2020. The SPX is now on track to achieve its fourth consecutive positive week, which hasn't happened since August of last year.

Looking ahead, next week presents a flurry of data points that will likely shake the market out of its recent calmness. The Federal Open Market Committee (FOMC) meeting, starting on Tuesday, holds the potential for a pause in interest rate hikes. Additionally, investors will closely monitor key reports on inflation and retail sales, which could influence the Fed's decision-making process.

The Federal Reserve's rate decision announcement is scheduled for next Wednesday afternoon, coinciding with the release of the May Consumer Price Index (CPI) report. In recent months, both headline and core CPI have shown signs of increasing, indicating potential inflationary pressures. Analysts anticipate the May CPI to show a 0.3% increase in headline inflation and a 0.4% increase in core inflation, with year-over-year CPI expected to drop to 4.7%.

From a technical perspective, the SPX faces psychological resistance at the 4,300 level, which has proven challenging to sustain during recent intraday rallies. Moreover, it is approaching a significant Fibonacci retracement level at 4,325, representing a retracement of the previous downturn. The emergence of a "wedge" pattern on the charts adds a bearish signal to the mix.

In the spotlight, Tesla (TSLA) shares surged to a seven-month high following the announcement of a partnership with General Motors (GM). The agreement allows GM's electric vehicles to utilize Tesla's charging network. Another notable earnings report next week comes from Oracle (ORCL), providing insights into corporate spending on technology and the cloud industry.

Investors will closely monitor earnings reports and market reactions as the second quarter earnings season approaches next month. Companies will likely need to exceed expectations by a significant margin to generate positive market sentiment, given the current high valuation levels. This trend aligns with findings from research firm FactSet, which noted that positive earnings surprises in the first quarter had less impact on stock prices than in previous periods.

Lastly, Signet Jewelers (SIG) highlighted the impact of the COVID-19 pandemic on the engagement market. CEO Gina Drosos mentioned a decrease in engagements due to disruptions in dating patterns three years ago. The company expects a rebound in engagements but experienced a decline in shares following a guidance update.

While the market is celebrating the new bull market milestone, it's important to note that a significant portion of stocks remain in bear market territory. As a result, near-term risks may increase, particularly if the market continues to rely heavily on a few dominant stocks for performance. Nevertheless, improvements in market internals, with more stocks trading above their 52-week averages, provide a positive signal.

Investors should prepare for an eventful week ahead, as the Fed's decision-making, inflation data, and retail sales reports take center stage. The market's resilience will be tested, and the outcome of these key events will shape the direction of the ongoing rally.

Source:https://tickertape.tdameritrade.com/market-news/bulls-run-market-up-20-from-fall-low-but-rally-faces-test-next-week-from-fed-inflation-data-19514?cid=EMTDACTTLGDP&uid=

Copyright Office Updates Rules for Secure Tests

 he United States Copyright Office has implemented five interim rules to regulate the examination of secure tests. These rules aim to streamline the examination process while ensuring efficiency and fairness.

The first interim rule, issued on June 12, 2017, outlines the application procedure for secure tests. Applicants are now required to submit an online application, a redacted copy of the entire test, and a brief questionnaire through the electronic registration system. This allows the Copyright Office to review applications and determine if the work qualifies as a secure test. Only eligible applicants will be granted an in-person examination appointment, during which the Office will assess the copyrightable elements of the test. The second interim rule, issued on November 13, 2017, introduces a new registration option for secure test questions and answers, as well as related materials stored in electronic databases or test banks.

On May 8, 2020, the Office issued an interim rule that modified the definition of a secure test to accommodate the COVID-19 pandemic. Previously, secure tests were required to be administered at specific centers. However, due to remote testing necessitated by the national emergency, the rule was amended to allow remotely administered tests to qualify as secure tests, provided the test administrators implemented security measures equivalent to in-person proctoring. Recognizing the ongoing impact of the pandemic, on February 19, 2021, the Office issued another interim rule permitting applicants to request a remote examination via secure videoconference for secure test registrations. This adjustment aimed to facilitate the examination process while adhering to social distancing measures.

In its most recent interim rule issued on June 1, 2023, the Office extended the provisions of the May 8, 2020, interim rule indefinitely. This rule removes the expiration date tied to the national emergency and maintains the expanded definition of secure tests under the same conditions as outlined in the 2020 interim rule. These interim rules provide a framework to ensure that secure tests receive fair and thorough examination by the Copyright Office. By adapting to the changing landscape, including remote testing due to the COVID-19 pandemic, the Office strives to uphold the integrity and security of secure tests while accommodating evolving circumstances.

Source:https://copyright.gov/rulemaking/securetests/?loclr=eanco