Weekly Stock Market Update & SPY Technical Analysis
Markets reached new record highs last week, with the S&P 500 and the Nasdaq leading the way. Investor sentiment is now at “extreme greed” as we enter the week of the July 9th trade deal deadline, which places pressure on policymakers to finalize deals with other countries. White House advisors have already released some statements saying that some trade deals will miss the deadline, perhaps prepping markets for the worst case scenario of that the deadline will be pushed back. Any sudden surprises could easily cause traders to take some profits and scale back.
Trade deals aren’t the only drivers of the market so far this month. Last week, investors celebrated another reading of the U.S. labor market. The U.S. unemployment rate fell to 4.1% in June, beating forecasts of 4.3%, while employers added 147,000 jobs despite elevated interest rates. Wage growth remained steady, with average hourly earnings rising 0.2% for the month and 3.7% year over year.
This healthy labor market report combined with the improving inflation data signal that the U.S. economy is on track for an interest rate cut in the near future. At this point The Fed may just be holding their breath to see if tariffs cause any price shocks to the economy before cutting rates. The next interest rate decision will be announced at the end of July, and if data remains steady, we may just see a rate cut at that time. We’ll update our outlook as the data is released in Hyper Stocks Pro.
This week is lighter on economic reports, with the biggest events being:
- Consumer Credit Report (Tue)
- Wholesale Inventories (Wed)
- Minutes of Fed’s May FOMC Meeting (Wed)
We’ll be addressing these updates in our daily morning analysis to see what parts of the market the data will impact the most.
SPY Technical Analysis:
Whether markets continue setting records this week or not, the market has proven its resilience in recent months and is likely to continue this push higher. We do expect capital to rotate out of the overextended names and into new sectors / industries in the coming weeks, but that’s a good thing for the general health of the market. For SPY in specific, the index reached a new record of 626.28 last week, making that our new resistance in focus coming into this week. Buyers need a breakout above that level to continue the “blue sky” rally. The index may be on the verge of a sudden pullback given it hasn’t seen any relief in recent days, we’ll update those critical levels and any signs of weakness in our daily morning analysis to our premium group.