Here’s The Asset Guidance Group Outlook for the Week Ahead… 

Although this week is peak vacation time for Wall Street traders, the calendar is filled with central bank decisions, economic data, and key earnings announcements.
Global flash PMIs get the action started this morning. In the U.S., the Federal
Reverse is expected to raise interest rates on Wednesday for possibly the last time in this cycle but will be keen to manage expectations going forward. The U.S. economy and labor market have been resilient, and inflation has been cooling, a goldilocks scenario for the Fed thus far. On Thursday the first look at Q2 GDP arrives, with forecasts calling for around 1.7% growth. Then on Friday, the core PCE and employment cost indexes are both expected to drop on a monthly and annual basis. On the earnings front, updates from Meta, Microsoft, Alphabet, and Intel will
keep the technology sector in the spotlight. Other U.S. releases include consumer
confidence, new and pending home sales, durable goods orders, and personal
income and spending. Overseas, the European Central Bank is likely to raise rates
25bps on Thursday, but hawkish sentiment is fading as the euro’s rise eases
inflationary pressures. The yen has also risen steadily this year, but with core CPI
above 4% a policy tweak from the Bank of Japan may come before year end, if not
at this week’s meeting. [1]

Recapping Last Week

U.S. equity indexes finished mostly higher for the eighth time in 10 weeks despite mixed economic and earnings data. The Russell 2000 Index gained 1.5%, while the S&P500 rose 0.7%. The Nasdaq Composite slipped 0.5% as earnings reports from Netflix and Tesla disappointed. Eight of 11 S&P500 sectors gained ground, led by 3%+ gains in energy, financials, and healthcare. Consumer discretionary dropped 2%+ after U.S. retail sales for June came in below forecasts. Treasury yields edged higher after U.S. jobless claims fell to a two-month low ahead of the July FOMC meeting, where the Fed is widely expected to raise rates by 25bps. Crude oil prices rose 2%+ as supplies tightened and China announced plans to boost auto sales. U.S. industrial
production fell 0.5% in June, while regional manufacturing surveys continued to show stagnation. In housing news, builder sentiment ticked up for a seventh straight month, but new homes sales cooled in June, while existing sales continued to be hampered by high mortgage rates and a critical supply shortage. Internationally, China’s Q2 GDP growth tumbled to 0.8% from 2.2% the prior quarter, while retail sales missed the mark for June. Japan’s core CPI rose 3.3% YOY in June, still well above the Bank of Japan’s target, but with services slowing, policymakers are unlikely to make any drastic changes at the upcoming meeting. In the UK, inflation cooled significantly in June but remained much too high relative to the Bank of England’s comfort level, while retail sales grew more than expected as good weather spurred spending. Canada saw headline inflation dip to +2.8% YoY, landing in the central bank’s target range of 1-3% for the first time in over two years. Lastly, Australia’s labor market remained tight, adding to the risk of additional rate hikes. [2]

Chart of the Week:

Of the major market indexes, the mega-cap Dow Jones Industrial Average (DJX)
has been the relative underperformer year-to-date. The Nasdaq achieved fresh
highs on a breakout of its sideways range in late March, whereas the S&P500 did so in mid-May. The DJX had been oscillating between a support level near $328 and resistance approaching $344 until last week. With the catalysts. of U.S. dollar weakness (noted last week) alongside the strength of Dow components JP Morgan, Johnson & Johnson, and UnitedHealth Group following Q2 earnings releases, DJX has now broken through its resistance level with 10 straight positive daily closes. The relative strength indicator illustrates the improvement of the Dow relative to the S&P500 throughout the week after a long period of underperformance. Could the Dow have more room to run after lagging for so long? Click here to view chart. [3]

Sources: [1] [2] [3] tdainstitutional.com tdainstitutional.com; Any performance data reported by Asset Guidance Group, LLC has been grouped and reported by kwanti.com, imported from TDAmeritrade Institutional, Risk categories as scored by Grable-Lytton test and grouped by like risk tolerance levels; NOTE: individual account performance grouped solely by model classification type in terms of risk tolerance. Individual portfolios include equivalent equities exposures via like models, but many may hold additional investments like structured notes, fixed income investments such as CDs, bonds, and other individually preferred securities. 1-Week risk score denotes overall performance of all AGG client portfolios grouped together by like-risk tolerance scores not by identical investment allocations; [4] [5] Macro Monday (tdainstitutional.com);

*All other Asset Guidance Group analysis, www.stockcharts.com; All index- and returns-data from Yahoo Finance; news from Reuters, Barron’s, Wall St. Journal, Bloomberg.com, ft.com, guggenheimpartners.com, zerohedge.com, ritholtz.com, markit.com, financialpost.com, Eurostat,0020Statistics Canada, Yahoo! Finance, stocksandnews.com, marketwatch.com, wantchinatimes.com, BBC, 361capital.com, pensionpartners.com, cnbc.com, FactSet; Chart from Indeed’s Hiring Lab.

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