Market Insights

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Sizing Up the S&P 500

• S&P 500 breaks June high as short-term bearishness grows
• 20-day moving average accelerates to downside
• Intermarket risks:
  • 10-year Treasury yield nears October high
  • U.S. Dollar index breaks downtrend from May
  • VIX holds 2021 closing low of 15
• Macro conditions potentially less favorable (more hawkish; see below)
• Potential levels:
  • 4328: June 26 low, near August 2022 high
  • 4200: February high and 50% retracement of March-July move.

Key News

• Hawkish comeback:
  • Retail sales +0.7% vs +0.4% estimate. Ex-auto +1% vs +0.1% estimate
  • Fed minutes: “upside risks to inflation … could require further tightening of monetary policy.”
  • Industrial production +1% vs +0.3% est
• But doves (deflation) lurking?
  • China slowdown: retail sales, industrial production, Country Garden collapse, PBOC rate cuts
  • Atlanta Fed inflation inflation expectations 2.5% in August vs 2.8% in July
  • Barchart.com: M2 money supply falling at fastest pace in at least 50 years
• U.S. Steel (X) jumps amid takeover reports

Mover of the Week: New York Times

• Earnings, revenue beat
• Subscriptions growing after business-model adjustments
• Potential transformation story
• NYT +31%

Upcoming Events

• Friday (8/17): DE earnings
• Wednesday (8/23): New home sales, crude-oil inventories
  • Earnings: NVDA, PTON KSS AAP ADI
• Thursday (8/24): Initial jobless claims
• Tuesday (8/15): Retail sales, NAHB housing index
  • Earnings: HD
• Wednesday (8/16): Oil inventories, Housing starts/permits, Fed minutes
  • Earnings: TGT, CSCO
• Thursday (8/17): Jobless claims, durable claims

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Security futures are not suitable for all investors. To obtain a copy of the security futures risk disclosure statement Investment and Trading Disclosures Booklet – Futures.

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