It was a bullish week for US equity indexes, with net weekly gains ranging from +3.0% (Nasdaq comp'), +2.4% (Dow), +2.2% (SPX), +2.0% (NYSE comp'), +1.8% (R2K), to +0.5% (Trans).
Lets take our regular look at six of the main US indexes
The SPX climbed for a third consecutive week, settling +63pts (2.2%) to 2950, having broken a new historic high of 2964. Weekly price momentum has turned back to net positive. Key upside resistance, giant psy'3K, and the next fib' extension of 3047.
A third week higher for the Nasdaq, settling +235pts (3.0%) to 8031. New historic highs are just another 1.8% to the upside.
The mighty Dow climbed for a third consecutive week, settling +629pts (2.4%) to 26719, the highest weekly close since Sept'2018. Weekly price momentum has turned fractionally positive.
The master index settled +260pts (2.0%) to 13047. This week saw a high of 13095, which was a brief foray above the April high of 13069. The Gundlach will be watching this index.
The R2K climbed for a third week, +27pts (1.8%) to 1549. Weekly price momentum is set to turn positive into end month.
A third week higher for the 'old leader' - Transports, +47pts (0.5%) to 10352. Weekly price momentum remains moderately negative.
All six of the main US equity indexes settled net higher.
The Nasdaq is leading the way higher, whilst the Transports is lagging.
The SPX broke a new historic high.
YTD price performance:
The Nasdaq comp' continues to lead, currently net higher for the year by 21.0%. The SPX is +17.7%, the R2K +14.9%, and the NYSE comp' +14.7%. The Dow is +14.5%, with the Transports lagging, but still higher by a respectable 12.9%.
Key event: G20, Osaka, Japan: Friday June 28th>Sat' June 29th.
T - LEN, MU, FDX
W - BB, GIS, KBH, NG
T - WBA, NKE, ACN, CAG
F - STZ
T - Case-Shiller HPI, FHFA house price index, new home sales, consumer con', Rich' fed
W - Durable goods orders, intl' trade, EIA Pet'
T - Q1 GDP (third print), weekly jobs, pending home sales
F - Pers' income/outlays, Chicago PMI, consumer sent'.
*as Friday will be end month, Q2, and H1, expect much higher volume.
Another week higher for US equities, with the SPX even breaking a new historic high. The gains are especially impressive considering the US/Iranian tensions.
Traders should be mindful of the Transports, which is lagging. The outlook from FedEx won't likely be pretty this coming Tuesday. Gold, which achieved a weekly close above the decisive breakout threshold of $1400, is arguably reflective of increasing capital market concerns. The VIX has a cyclical setup that is very similar to Aug-Sept'2018.
It remains the case that the market will very likely respond positively to rate cut'1 this July 31st. Before then though, there is threat of a powerful swing lower to fully fill all downside gaps to sp'2762/44.
The more cautious bears are going to trade very light (if at all) until after a rate cut'1 multi-week bounce, that could easily carry across August, and into Sept'. The more cautious bulls will be quietly scaling out each point closer to sp'3K, on the notion that we're at/near the end of the economic cycle.
The US/global bond market sure as hell continues to sound alarm bells. The US 10yr yield didn't print 1.99% this week for no good reason, and nor is the German 10yr at -0.28% something to just lightly dismiss.
Ohh, and if you think a series of rate cuts are bullish for equities, I still strongly suggest you stare at the following for a good hour or two...
... and no, I would not agree the current setup is comparable to 1998. Things are very different to that era, not least in terms of consumer, corporate, and government debt levels.
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Have a good weekend
*the next post on this page will likely appear 5pm EDT on Monday.