Weekly Market Update & SPY Technical Analysis


Weekly Market Update & SPY Technical Analysis

Markets posted their best week of the year last week after new economic data helped relieve recession fears and restored confidence that a rate cut is coming in September. Earlier this month, markets saw what some would describe as a “flash crash,” which wiped billions from many companies’ market valuations, but buyers have actively bought the dip since. Last week’s CPI data brought more confidence to those buyers after the inflation number came in better than expected. CPI inflation reflected a reading of 2.9%, the first time below 3% since 2021, bringing it closer to The Fed’s 2% target. This accomplishment brings The Fed closer to loosening their monetary policy and lowering interest rates. 

Another cause for celebration last week came from the retail sales data, which grew at a rate of 1% in July, far above the previous month’s reading of -0.2%. This new data helps curb the recession argument in the short term, relieving investors that the U.S. GDP may still hold up since consumer spending makes up two-thirds of that number. 

Coming into this week, the economic front looks clear, so markets may continue to push on with the rally. There are some Federal Reserve members speaking, and The Minutes Report from the last FOMC will be released, but nothing major is expected. 

SPY Technical Analysis:

SPY’s daily candle (not shown above) gapped back above the 50 day moving average last week. The 50 DMA is ofter watched by institutional investors to gauge the trend of a stock, so SPY’s recovery back above this point may be the signal that buyers are looking for to regain their sentiment. Buyers are looking for a move above 556.75 next, our price target above that level is near all time highs at 565.39. There may be a support retest early in the week to around 544.00-546.00, which would be a dip buying opportunity.