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Income and Spending, Canopy Earnings, Big Lots: 3 Things to Watch

By Liz Moyer

Investing.com -- Stocks are shaking off concerns about an aggressive Fed and production disruptions in China and staging a rally, heading for a weekly gain ahead of the Memorial Day weekend.

Of course, that could change Friday when new data on inflation and personal income and spending come out, but the momentum was building Wednesday and Thursday.

Part of the reason is the take-away from the Federal Reserve's meeting minutes from early May, which indicate that the central bank could slow down its tightening if it sees signs inflation is on a downward trend. It is still expected to raise rates a half-percentage-point each in June and July.

The personal consumption expenditure index is also due out on Friday, and that will be closely watched as it is the Fed's preferred measure of inflationary trends. The last PCE showed a 6.6% jump over one year. What investors want to see is that inflation is moving down by comparison to last year and prior months.

Friday is the last day before a three-day holiday in the U.S. markets.

Here are three things that could affect markets tomorrow:

1. Income and spending

The government will release data on personal income and personal spending at 8:30 AM ET. Personal income is seen gaining 0.5% from the prior month, the same rate as the last reading. Personal spending is seen gaining 0.7%, which would be down from 1.1% the prior month.

2. Canopy Growth earnings

Canopy Growth Corp (NASDAQ:CGC) is expected to report earnings of $8.53 a share on revenue of $104 million, according to analysts tracked by Investing.com.

3. Big Lots

As retail earnings continue, Big Lots Inc (NYSE:BIG) is expected to report earnings per share of $1.09 on revenue of $1.46 billion.

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