Chart of the S&P 500 (SPX) – The Week Ahead: Fed Minutes, U.S. Inflation, Earnings Kick Off – Source: TheTechnicals.com and TradingView

The market continued to build bullish momentum last week after previously wobbling. The S&P 500 (SPX) hit nearly a six-month high on Friday, inching ever closer to September’s record high. At this rate, we could soon be seeing a breakout to new highs and a near-term target of 3,000. Globally, the picture is just as bright. Equity markets in Asia, Europe, and elsewhere have also rallied sharply. Crude oil prices have hit new multi-month highs. And the U.S. dollar is just off its own long-term highs.

Economic Data Driving Markets

What accounts for this bullishness we’re seeing in several different major markets?

For one, while there are still heavy concerns about a global economic slowdown, we’ve recently seen some solid strength in economic data. This includes highly positive manufacturing data from several countries, including China, the U.K., and the U.S.

Also, Friday’s U.S. jobs report far surpassed expectations for March jobs growth. 196,000 jobs were created in March against previous forecasts for around 175,000. In addition, the unemployment rate remained near long-term lows at 3.8%, as expected.

Couple the recent spate of good economic news with a dovish Federal Reserve (and other major central banks) leaning towards lower interest rates for longer, and markets would be hard-pressed not to rise. Add to this the eagerly awaited prospect of a successful U.S.-China trade agreement, and the recipe for a bull market is firmly entrenched.

What to Expect in the Week Ahead

The Fed’s FOMC Minutes

As noted, the dovishness of the U.S. Federal Reserve is one factor helping to boost markets. Since the beginning of the year, the key question has turned from “will the Fed continue raising interest rates this year?” to “will the Fed start cutting interest rates this year?” Last month’s pivotally dovish FOMC meeting was a major factor in the market’s continued surge. On Wednesday, we will get to see just how dovish the Fed was during that meeting, with the release of the FOMC meeting minutes. This could be a significant market-mover.

U.S. Inflation

Also on Wednesday, the U.S. Consumer Price Index, a key measure of inflation, will be released. And on Thursday, we’ll also see the release of the U.S. Producer Price Index. Put together, these important inflation readings will give clues as to whether the Fed will be able to refrain from raising interest rates.

Here are some other major global economic events in the week ahead (all times listed are in U.S. Eastern Time):

• Wednesday, 4:30 AM ET – U.K. Gross Domestic Product (m/m) and Manufacturing Production (m/m)
• Wednesday, 7:45 AM ET – European Central Bank (ECB) Main Refinancing Rate and Monetary Policy Statement
• Wednesday, 8:30 AM ET – European Central Bank (ECB) Press Conference
• Wednesday, 8:30 AM ET – U.S. Consumer Price Index and Core CPI (m/m)
• Wednesday, 2:00 PM ET – U.S. FOMC Meeting Minutes
• Thursday, 8:30 AM ET – U.S. Producer Price Index and Core PPI (m/m)

Earnings Kick Off

Though there won’t be a lot of major large-cap earnings releases in the week ahead, this week roughly marks the start of the new earnings season. Most importantly, a handful of key financial companies report on Friday. This includes both JPMorgan Chase (JPM) and Wells Fargo (WFC).