Image Source: The S&P 500 was in a precarious position this past week, but my key area within the 5,265 to low 5,270 range held on Thursday, and I preferred a long bias going into Friday. The key goods orders data came in above expectations, but it was not as hot as feared. Therefore, stocks ran with it – and I consider it essential that the Nasdaq led, as it bounced above the pre-Nvidia earnings level while the S&P 500 did not. So, we have the bull upleg ingredient in place, just as much as the potential for a steep Nasdaq reversal that‘s not a function of just Nvidia (or Dell Technologies).Communications and consumer discretionaries did well while bonds did their best to climb the wall of worry of incoming data painting a resilient economy ahead with sticky inflation that‘s not going away. In this light, Friday‘s revision to consumer confidence and inflation expectations was mostly positive for risk taking. Therefore, I say that the right sectors are leading: tech, financials (all eyes are on the financial sector recovering from two cold water pronouncements), and consumer discretionaries (it‘s not just Amazon – Lululemon, Abercrombie, American Eagle, e.l.f., Ralph Lauren, and even Target have experienced trouble declining).The sectoral mix was right, in that financial and industrials rose as well while defensives didn’t crater – and once again, the lower volume or inside bar on Friday isn’t an issue. I‘m counting on tech, and of course Nvidia and beyond, to lead.And what do I expect from next week‘s economic data? As promised, I am sharing what all clients had at their disposal during European trading hours on Friday – the reasoning as to before the close.
Let‘s move right into the charts, which are courtesy of . Today’s full scale article contains five more charts, along with commentary.
Credit Markets
(Click on image to enlarge)The best thing about this chart is ‘s relative outperformance. A break above Thursday‘s highs would be a gift to the stock market bulls, who can then do the same.
(Click on image to enlarge)Yields overall flashed an amber light, not a red one. For as long as rate hike(s) don‘t get factored into expectations, for as long as the September cut remains in the game (it‘s merely a coin toss now), and for as long as perceptions are of inflation getting off the ground while the economy doesn’t slow down below a soft landing, stocks are fine – that is, that was especially true until Thursday.More By This Author:Reversing, But For How Long?NVDA Earnings ResolutionReady For Nvidia
Climbing The Wall Of Worry
