The substantial rise in bond yields and strength in the jobs sector kept the bears active selling into the Friday close worried about what the Fed will do next. Markets hate uncertainty and with a Wednesday CPI report, PPI on Thursday with the big bank reports starting on Friday to begin 3^rd quarter earnings we have a basket full of uncertainty. However, with light earnings and economic calendars both Monday and Tuesday we could see a lot of choppy price action as we wait. 

Asian markets finished Monday mixed after China missed expectations in June’s inflation data.  However, European markets trade modestly bullish this morning recovering some of the early losses.  U.S. futures have chopped around the flatline with some trepidation as we wait for inflation data the big bank reports later this week.

Economic Calendar

Earnings Calendar

Notable reports for Monday include PMST & WDFC.

News & Technicals’

The future of midsized banks in the US looks uncertain as they face multiple challenges in the post-pandemic economy. With interest rates rising, commercial real estate suffering, and regulators tightening their oversight, many regional banks may struggle to maintain their profitability and independence. Analysts expect a surge of consolidation in the banking sector, as half of the existing banks could be acquired by larger rivals in the next 10 years. However, some banks may be able to survive and grow by becoming acquirers themselves, according to Lazard’s new CEO Peter Orszag. The fate of these banks will become clearer as they report their second-quarter earnings this month, which are likely to show declining revenues for some of them.

Goldman Sachs predicts that India will rise to the rank of the world’s second-largest economy by 2075, surpassing the US and Japan. The main factors behind this projection are India’s large and growing population, which is expected to reach 1.6 billion by 2050, and its rapid development in innovation and technology sectors, such as software, biotechnology, and renewable energy. The investment bank also expects India to increase its capital spending and improve its labor productivity, which is currently below the global average. These reforms will boost India’s economic growth and income levels, making it a major force in the global market.

China’s economy continued to face deflationary pressures in June, as both producer and consumer prices fell below expectations. The producer price index (PPI), which measures the cost of goods at the factory gate, dropped 5.4% year-on-year, the sharpest decline in more than four years. The consumer price index (CPI), which tracks the changes in the prices of goods and services purchased by households, remained flat in June, after rising slightly in May. The fall in pork prices, which had been a key driver of inflation in the past year, contributed to the weak CPI performance. In response to the sluggish economic recovery, Chinese Premier Li Keqiang vowed to provide more policy support, especially for small and medium-sized enterprises, which are vital for job creation and growth.

The market is still focused on what the Fed will do next, and the June employment report was the main driver of Friday’s trading. Stocks ended slightly lower, as the market interpreted the job and wage numbers as strong enough to keep the Fed on track to raise rates in the near future. The bond market also showed this, with interest rates rising significantly lately adding to the uncertainty and making the bears a bit more active.  With CPI and PPI numbers to deal with and the beginning of 3^rd quarter earnings that will kick off this Friday with some big bank reports expect considerable pensiveness in the price action for Monday and Tuesday as we wait.

Trade Wisely,

Doug

Talk that the U.S. may block Chinese firms from using cloud-computing services engaged the bears on Wednesday but once again the desire to buy up a handful of tech giants reduced the bearish impact.  Not surprisingly the Fed minutes add to the odds of more rate hikes on the way with core inflation remaining well above the committee’s 2% target.  Today we have a busy day of economic reports that could prove to be market moving along with a very light day of earnings to find inspiration. Volume could remain light as we wait for the big bank’s reports to kick off 3^rd quarter’s earnings still a week away.

Asian markets extended the selloff with Hong Kong leading the way down 3.02% in reacting to the future rate increases from the Fed.  European markets are also decidedly bearish this morning with red across all indexes.  With a busy morning of economic reports ahead, the U.S. futures suggest a bearish open with the bears showing a bit more vigor in the tech sector than we have seen for some time. 

Economic Calendar

Earnings Calendar

Notable report for Thursday is LEVI after the bell.

News & Technicals’

Meta, the company formerly known as Facebook, has launched a new text-based messaging app called Threads. The app is designed to look and feel like Twitter but with some key differences. Users can sign up with their Instagram usernames and follow the same accounts they already follow on Instagram. This could give Threads an edge over Twitter, which has been struggling with various problems since it was acquired by Tesla CEO Elon Musk. Threads aim to offer a simpler and more engaging way to communicate with friends and influencers.

The world economy is facing a serious threat of recession as commodity prices plunge to their lowest levels in a year. The S&P GSCI Commodities index, which tracks the prices of 24 major commodities, has fallen by more than 25% since last November, reflecting weak demand and oversupply. Commodities such as oil, copper, iron ore, and soybeans are vital for industrial production and consumption, and their falling prices signal a slowdown in global growth and trade. Market watchers warn that the commodity slump could trigger a vicious cycle of deflation and debt.

OpenAI, the artificial intelligence research company, is facing a legal challenge from two authors who accuse it of using their books to train its chatbot, ChatGPT, without permission. ChatGPT is a conversational agent that can generate natural language responses based on user input. The authors, Paul Tremblay and Mona Awad claim that ChatGPT can produce “very accurate summaries” of their novels, “A Head Full of Ghosts” and “Bunny”, respectively. They argue that this implies that ChatGPT was trained on their copyrighted works, which would constitute an infringement of their intellectual property rights.

On Wednesday, stocks fell as reports of a U.S. plan to block Chinese firms from using cloud-computing services increased geopolitical tensions and reduced risk appetite after the holiday break. The sector performance and the lagging of small-caps showed a slight preference for defensive sectors, which will be tested by the economic and inflation indicators in the coming days. The June jobs report on Friday, the June consumer price index (CPI) report and the second-quarter earnings season next week will be the main events to watch. Analysts expect core CPI to drop from 5.3% in May to 5.0% (year-over-year) in June. These employment and inflation data will have a significant impact on the market expectations for the Fed’s actions and the stock- and bond-market behavior as the summer goes on.

Trade Wisely,

Doug

The bulls were unable to follow through on the Tuesday rebound in a mixed and choppy day though energy, health care, and utilities enjoyed some buying activity.  With the 2^nd quarter coming to an end watch for the possibility of some end-of-quarter window dressing but keep in mind earnings, Fed uncertainty, and the coming holiday could produce choppy low-volume price action in the afternoons.  However, price volatility is likely with GDP, Jobless Claims, and Housing numbers pending.

Asian markets mostly declined as we slept with the tech-heavy Hong Kong exchange leading the selling down 1.24% on the day. However, European markets are working to extend yesterday’s relief rally with only the FTSE struggling with a slight decline.  U.S. futures point to a bullish open ahead of market-moving economic data that could quickly improve or reverse market conditions.

Economic Calendar

Earnings Calendar

Notable reports for Thursday include AYI, GBX, LNN, MKC, NKE, PAYX, PRGS, RAD, SMPL, & SGH.

News & Technicals’

The Federal Reserve’s annual stress test revealed that all 23 of the U.S. banks that participated in the exercise could withstand a severe recession and maintain their lending activities. However, the test also showed a wide range of loan loss rates among the banks, depending on their exposure to different types of loans. Credit cards were the most vulnerable to defaults, resulting in a high loss rate of 14.7% for Capital One, while Charles Schwab had the lowest loss rate of 1.3% due to its focus on brokerage services. The stress test results could pave the way for some banks, such as JPMorgan Chase and Wells Fargo, to announce higher dividends and share buybacks on Friday after the market closes.

A massive healthcare fraud scheme that targeted programs for the elderly and disabled was busted by the Department of Justice, which announced charges against 78 people for their involvement. The DOJ said the fraudsters submitted $2.5 billion in false claims and used the proceeds to fund lavish lifestyles, buying expensive cars, jewelry, and yachts. Some of the defendants allegedly exploited telemedicine services to make fraudulent claims, while others allegedly billed for prescription drugs that were not medically necessary or not provided at all.

The market had a mixed and choppy day on Wednesday, with the S&P 500 barely moving, the Dow losing 73 points, and the Nasdaq rising 0.3%. Some sectors that benefit from economic growth, such as consumer discretionary, communication services, and energy, outperformed others that are more defensive, such as utilities, consumer staples, and health care.  The 10-year Treasury yield stayed around 3.75%, in nearly a 100 basis point inversion with 2-year bonds. This morning all eyes are focused on the pending GDP, Jobless Claims, & Home Sales numbers with a smattering of earnings as we wind down the quarter.  Expect some price volatility this morning keeping in mind we could see some end-of-quarter window dressing.  However, we could also see volumes begin to decline as traders head out to extend their holiday.

Trade Wisely,

Doug

Yesterday’s better-than-expected economic data inspired the bulls but it may also be a double-edged sword that inspires the Fed hawks and raises the odds of rate increases. That said, the QQQ and SPY charts enjoyed a nice relief rally that held trend and price support levels.  The DIA and IWM also rallied but remained challenged by significant overhead resistance. Today we have a few more earnings, potential market-moving economic reports, and another speech from Jerome Powell to add a dose of uncertainty as to what comes next. 

Asian markets closed mixed with modest gains and losses while Japan continued its breakout rally surging 2.02%.  European markets are breaking their losing streak this morning despite the warnings from the ECB that more rate hikes are on the way to combat inflation.  U.S. futures however seem to be taking an wait and see approach this morning suggesting a mixed flat open ahead of earnings and economic data that could set the direction for the day.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday include BB, GIS, FUL, KFY, MU, FIZZ, & WOR.

News & Technicals’

The European Central Bank (ECB) has been tightening its monetary policy in response to the soaring inflation in the eurozone, which reached a record high of 4.9% in November. The ECB raised its key interest rate to 3.5% earlier this month, the fifth increase since July 2022, when it started to lift rates from the historic low of 0%. However, ECB chief economist Philip Lane cautioned that the market should not expect a rapid reversal of the restrictive policy, as the inflation outlook remains uncertain and the economic recovery is uneven. He told CNBC on Tuesday that the timing and speed of policy normalization would depend on the evolution of inflation and growth in the coming months.

Google has faced an internal backlash over a drag show that was scheduled to take place as part of its Pride celebrations. The show, which was organized by a group of LGBTQ+ employees and allies, was met with resistance from some co-workers who signed a petition to cancel the event. The petitioners argued that the drag show was offensive and disrespectful to Christians, and accused Google of discriminating against their religious beliefs, according to CNBC. Google has since decided to distance itself from the show, which is still open to the public, and instead invited its employees to join a social gathering at its offices.

A federal watchdog has warned that a huge amount of Covid aid money may have been lost to fraud. The Small Business Administration (SBA), which administered two major relief programs for small businesses affected by the pandemic, may have disbursed more than $200 billion to fraudulent applicants, according to the inspector general. This would amount to 17% of the total $1.2 trillion that the SBA distributed through the Economic Injury Disaster Loan program and the Paycheck Protection Program. The inspector general blamed the massive fraud on the lack of adequate internal controls and oversight, as the SBA rushed to deliver the loans amid the crisis.

Tuesday’s economic data, durable goods orders, consumer confidence, and new home sales in May were better than expected bringing out the bulls, and raising the odds of future rate increases to reach the Fed’s 2% target.  The S&P 500, Nasdaq, and Russell 2000 all rose by more than 1% while big tech kept up their momentum gaining more than 1.5% on weaker-than-average volume. That said the DIA and IWM remain under significant price resistance while the tech giants almost exclusively keep the SPY and QQQ trends bullish.  Today traders will have a few more earnings reports, trade, inventory, and oil numbers along with more comments from Jerome Powell to keep them guessing. Remember we could see possible end-of-quarter window dressing and/or declining volume as traders shut down early this week to extend the holiday.  Watch for whipsaws around data points with a possible choppy light volume filling as we make our way toward the weekend.

Trade Wisely,

Doug

Yesterday some of the tech sector giants experienced some selling pressure as the bears attacked suggesting this overbought area of the market may finally find some profit takers.  Bond yields proved stubborn despite an otherwise choppy market day on lower-than-average volume.  That, however, could change today with the pending economic reports that may prove to be market-moving creating some price volatility.  Watch for whipsaws, and possible end-of-quarter window dressing as the uncertainty of the FOMC’s next actions and investors ponder current valuations in light of the pending third-quarter earnings season.

  Asian markets ending the day mixed while we slept led by Hong Kong rising 1.88%.  European markets trade mixed and choppy this morning as they wait on the ECB comments that have recently talked hawkishly on their inflation fight.  U.S. futures currently point to a modestly bullish open ahead of possible market-moving economic data that could inspire the bulls or the bears so be prepared for just about anything.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday include AVAV, JEF, SCHN, & WBA.

News & Technicals’

Lordstown Motors, a startup company that builds electric pickup trucks, has filed for bankruptcy protection and sued its former partner Foxconn, the world’s largest contract electronics manufacturer. The lawsuit accuses Foxconn of fraudulent conduct and breaching an agreement to invest up to $170 million in Lordstown and to handle the manufacturing of its vehicles at an Ohio factory that Lordstown bought from General Motors in 2019. Lordstown claims that Foxconn willfully and repeatedly failed to execute the agreed-upon strategy, leaving it with no choice but to seek Chapter 11 protection in Delaware. Foxconn has not yet responded to the allegations.

Retatrutide is a novel drug candidate from Eli Lilly that targets three hormones involved in regulating appetite and blood sugar: GLP-1, GIP, and glucagon. It is a weekly injection that has shown promising results in treating obesity and type 2 diabetes. According to new results from two phases 2 trials, retatrutide helped patients lose up to 24% of their weight after almost a year, the highest reduction seen in the obesity drug space to date. The researchers also reported that the weight loss did not appear to plateau after 48 weeks, suggesting that longer treatment could lead to more benefits. Retatrutide also improved blood sugar, cholesterol, and blood pressure levels in patients with type 2 diabetes. Retatrutide has an overall safety and tolerability profile similar to other hormone-based therapies for obesity.

The S&P 500 lost 0.5% on Monday, as the bears attacked some of the tech giants that have served as the market leaders this year. The Dow also slipped 13 points, while the Nasdaq fell 1.2% retreating from its overextended condition. 10-year Treasury yields dipped below 3.7% in the morning before recovering slightly by the end of the day. However, Monday’s market action was mild overall on lower than average volume. Today’s direction could be determined by the economic calendar news with Durable Goods, Consumer Confidence, and New Home Sales figures that could inspire the bulls and bears. Keep in mind Europe is waiting for an ECB rate decision.

Trade Wisely,

Doug

After Jerome Powell suggested more rate increases likely during his Congressional testimony traders and investors remained wary as the low volume pullback finished a week of uncertainty.  However, no technical damage occurred so it will be interesting to see if the bulls can respond with a comeback this week as we enter the corporate buyback period.  Though we don’t have much to inspire the bull or bears today we have significant economic reports this week that could move the market as we move toward the end of the quarter and next week’s holiday shutdown.

Overnight Asian markets struggled as oil prices surged due to the Russian rebellion and closed the day mostly mixed.  European markets trade mostly lower to start the new week though selling energy appears light and uncertain.  As a result, early futures gains have turned slightly negative suggesting a flat to slightly bearish open with very little data to provide directional inspiration so keep an eye on the news cycle.   

Economic Calendar

Earnings Calendar

Notable reports for Monday include CCL & CUK.

News & Technicals’

A failed coup attempt by a Russian mercenary leader has shaken the Kremlin and exposed the growing rift between President Putin and his former loyalist. Yevgeny Prigozhin, who heads a notorious private military company known as Wagner Group, tried to seize power in Moscow on Friday with the help of hundreds of armed men. However, his plot was quickly foiled by the security forces and he was forced to flee to neighboring Belarus. The incident has raised questions about Putin’s control over his security apparatus and his ability to deal with the rising ambitions of Prigozhin, who has been accused of meddling in foreign conflicts and elections.

The U.K. is facing a severe mortgage crisis as the Bank of England unexpectedly raised its base rate by half a percentage point on Thursday. The move, which was aimed at curbing inflation, will increase the cost of borrowing for millions of homeowners who have variable-rate mortgages linked to the central bank’s rate. Finance Minister Jeremy Hunt held an emergency meeting with major lenders on Friday to discuss ways to ease the pressure on borrowers and prevent a wave of defaults and foreclosures. According to a study by the NIESR, the rate hike could push 1.2 million households (4% of the total) into financial distress by the end of the year as they run out of savings to cover their mortgage payments.

The U.S. corporate sector is facing a surge in defaults and bankruptcies as the economy struggles to recover from the pandemic. According to Moody’s Investors Service, 41 U.S. companies defaulted on their debt in the first five months of this year, more than twice as many as in the same period last year. The main causes of default are weak demand, high leverage, and rising interest rates that make refinancing harder and more costly. The number of U.S. companies filing for bankruptcy protection has also soared to the highest level since 2010, indicating that many businesses are unable to cope with their debt burdens.

Investors remained wary Friday as they feared that central banks might have to keep raising interest rates to curb inflation, though markets recovered some of their losses by the end. The S&P 500 broke its five-week winning streak with a weekly drop, while global stocks had their worst weekly performance in over three months. Two factors that weighed on sentiment were the sluggish European economic data that came out overnight and the smaller-than-expected Chinese rate cuts this week. Oil prices also fell for the day and the week, losing almost 5%. Meanwhile, government bonds and the U.S. dollar gained, reflecting the nervous mood in equity markets where defensive sectors did better.  We have entered the corporate blackout period and with a holiday next week expect volume to begin to decline by the end of the week. Today we have both a light earnings and economic calendar but all eyes will be focused on Tuesday’s Durable Goods report hoping to see continued strength in the consumer and a resumption of the market rally.

Trade Wisely,

Doug

After the very exuberant rally, the bulls have taken a breather and though the bears seem to be slightly more active they’ve not shown much aggressiveness as yet.  Though the QQQ took the worst of the day with Jerome Powell suggesting more rate hikes are likely the indexes remain in bullish patterns suffering no technical damage.  However, today we have a few possible market-moving economic reports, a handful of notable earnings along with plenty of Fed talk keeping the path forward uncertain.  Prepare for just about anything as we wind down the quarter with a new round of earrings just around the corner.

Asian market continued to show some weakness in reaction to the Fed rate comments with the tech-heavy Hong Kong exchange once again leading the selling down 1.98%. European markets facing a BOE rate decision trade red across the board.  Ahead of a handful of earnings and the busiest day this week of economic data U.S. futures point to a negative open as Jerome heads the hill to be grilled in Congress for a second day.

Economic Calendar

Earnings Calendar

Notable reports for Thursday include ACN, DOOO, DRI, CMC, FDS, GMS, & SWBI.

News & Technicals’

As part of his first state visit to the U.S., Prime Minister Narendra Modi of India discussed a range of defense and technology partnerships with President Joe Biden and other U.S. officials on Thursday. The two leaders have also exchanged views on climate change, democracy, human rights, and the COVID-19 pandemic. Modi’s visit reflects the U.S. strategy of “friend-shoring”, which aims to reduce its dependence on China and strengthen its ties with other countries in the Indo-Pacific region.

Senator Jim Risch of Idaho, a Republican, has proposed a bill that would weaken the influence of unions in the U.S. labor market. The bill would make it illegal for unions to use labor slowdowns as a bargaining tactic, as they did in the recent West Coast port dispute, and impose heavy fines for such actions. The bill would also prevent unions from blocking port automation, which they fear would cost jobs and reduce wages. The bill faces strong opposition from Democrats and labor groups, who have defeated similar attempts in the past.

The online retailer Overstock.com has won the bid to acquire the brand name and online assets of Bed Bath & Beyond, the bankrupt home goods chain. The deal, worth $21.5 million, means that Bed Bath & Beyond’s physical stores will be shut down and its customers will be redirected to Overstock.com. The fate of Bed Bath & Beyond’s sister chain, Buy Buy Baby, will be decided in a separate auction next week.

So far this week the bulls have taken a breather in the past few days and the bears seem to be sniffing around a bit more though have yet to show much energy. Wednesday, the S&P 500 fell 0.5% and the Dow lost 102 points. The Nasdaq dropped more than 1%, as growth and technology stocks faced more selling pressure. Devoid of major economic news, investors were focused on the Fed’s policy outlook and the uncertainty that provides for the path forward. Asian and European markets have also seen some softness with possible stimulus on the way in China while ECB and BOE continue to see more rate increases as inflation remains stubbornly high. Today trades will look for inspiration in earnings reports, Jobless Claims, Existing Home Sales, Natural Gas & Peterloum numbers along with several Fed speaking including Jerome Powell. 

Trade Wisely,

Doug

The bears made an appearance on Tuesday as the market ended lower despite the bullish attempt to recover in the afternoon session on a day short on earnings or economic data.  The focus today will be on the string of fed speakers along with Jerome Powel beginning his 2-day congressional grilling on the hill.  Although the market may experience some volatility during his testimony depending on how hawkish or dovish he sounds no policy changes from the Fed are likely to be revealed.

While we slept Asian markets closed mostly lower with Hong Kong once again leading the selling down 1.98% at the close.  However, European markets trade mostly with modest gains at the time of writing this report despite U.K. inflation coming in hotter than expected at 8.7% indicating there is still more work to do by the ECB.  U.S. futures focused on the uncertainty of Fed policy currently indicate a flat open as they wait on the Powell testimony in Congress at 10 AM Eastern. 

Economic Calendar

Earnings Calendar

Notable reports for Wednesday include KBH, KFY, SCS, & WGO.

News & Technicals’

The relationship between the U.S. and China has deteriorated further after President Biden made a controversial remark about China’s leader Xi Jinping. Biden said he had “no illusions” about Xi and that he was “not a friend of democracy”. This comment angered China, which accused the U.S. of disrespecting its sovereignty and interfering in its internal affairs. The tension comes on the heels of a tense visit by Secretary of State Blinken to Beijing, where he tried to ease the friction caused by the U.S. shooting down a Chinese balloon in February. China denies that the balloon was used for spying and calls it a peaceful scientific experiment.

A new bill that aims to prevent big bank executives from getting excessive bonuses after their banks collapse or engaging in misconduct will be debated by the Senate Banking Committee. The bill called the RECOUP Act, is sponsored by the committee’s top Democrat and Republican, who say it will protect taxpayers and investors from bailing out failed banks. The bill would give regulators more power to claw back or cancel executive compensation if a bank violates the law or suffers major losses.

A Republican lawmaker is proposing a bill that would crack down on investment funds that factor in environmental, social, and governance issues, or ESG, in their decisions. Rep. Andy Barr, R-Ky., says his bill would protect investors from being misled by funds that claim to be ESG-friendly but do not disclose their criteria or performance. The bill is part of a broader Republican campaign to challenge what they see as “woke” investing that undermines American values and interests.

The stock market ended lower on Tuesday, losing some of the momentum from last week’s strong rally that extended the S&P 500’s streak of weekly gains to five. There was not much news or data to influence the market, which remained focused on the future of Fed policy. Interest rates edged down, with 10-year Treasury yields falling below 3.75%. Most sectors finished in negative territory, with energy and materials suffering the most as commodity prices declined. Today we have a parade of Fed speakers highlighted by the 2-day testimony in Congress from Jerome Powell.  Although it is unlikely he will reveal any policy changes, it’s possible the market could experience price volatility depending on how hawkish or dovish he sounds. 

Trade Wisely,

Doug

Last Friday as we headed into a 3-day weekend the six-day winning streak broke with a modest decline.  Is this a temporary pause or could we be at or near a summer market high as we wait for the next round of earnings?  Currently, the SP-500 10-year P/E ratio is 29.8 which is 47.4% above the modern-ear market average of 20.2 suggesting an overbought condition.  However, investor enthusiasm for risk may still push the index toward a 4500 print.  We have a light day on both the earnings and economic calendar with a bit of follow-through selling pressure showing up in the pre-market.

Asian markets traded mixed with modest gains and losses, however, the tech-heavy HSI fell 1.54%.  European markets trade red across the board this morning following Monday’s declines.  Ahead of a light day of earnings and economic reports U.S. Futures point to a lower open to begin our holiday-shortened week.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday FDX & LZB.

News & Technicals’

The situation in Ukraine has escalated as Russian forces continue to launch air strikes on several cities and towns. The Ukrainian government has declared a state of emergency and activated its air defense systems. However, it admits that its counteroffensive is proving challenging due to the overwhelming number of Russian troops and aircraft. The international community has condemned the Russian aggression and called for an immediate ceasefire and dialogue.

The Bank of England faces a difficult decision as it prepares to announce its latest policy stance on Thursday. The central bank has to balance the risks of rising inflation and labor shortages against the uncertainties of the post-pandemic recovery and the potential impact of new variants of the coronavirus. The latest inflation data, due on Wednesday, is expected to show a further increase in consumer prices, adding to the pressure on the Bank to tighten monetary policy sooner rather than later.

The S&P 500 six-day winning streak broke on Friday which had lifted it to new highs for the year closing only slightly in the red. The big question is, have we put in a top or is this just a short-term pause in the overall rally? Investors have high hopes that the Fed is done raising rates despite the fact the committee suggested their terminal rate is 50 basis points higher as they work for the 2% target. The rally was more broad-based recently with more sectors and stocks joining the upward trend, but the Nasdaq still led the way, posting its best weekly performance since late January. Hopes of more stimulus from China and a weaker dollar also helped the bullish mood. Asian markets followed suit, as the Bank of Japan kept rates steady. Meanwhile, government bonds fell as the 10-year Treasury yield climbed to 3.77%.

Trade Wisely,

Doug