Markets closed strong last Friday with the S&P 500 notching a 3.1% gain, marking the best day in the index since May of 2020. Bonds also staged a rally last week, pushing rates down in a potential sign inflation is coming under control and hopes the Fed can be less aggressive with future rate hikes. Heading into the last week of the quarter, it’ll be interesting to see if markets can string together back to back weeks of gains. However, after a dearth of economic data last week, markets will see a deluge this week.
Aside from this morning’s read on durable goods, which were up 0.7% vs. forecasts of 0.3%, this week will also bring data on housing prices; GDP;an OPEC meeting; personal income and spending; construction spending; and earnings from companies like NikeNKE
, Bed, Bath and Beyond and Micron. Also this week, we’ll get numbers on heating oil stockpiles. Normally, this wouldn’t be a number I’d care much about; however, in light of the war in Ukraine, heating oil stockpiles may have implications with respect to inflationary pressures.
After the close today, Nike will report earnings. Shoe, athletic wear and most other items that make up the Nike line, are discretionary spending items and I’m interested not just in Q1 earnings, but forward looking guidance. Given the strides Nike has made there, this will also offer investors a glimpse inside China’s economy as well.
This is the last week of June and the end of Q2. It’s not uncommon to see some window dressing at the end of quarters as fund managers look to shore up returns. That could give markets a little extra push. At the same time, I’m keeping an eye on overall market volatility levels. Despite last week’s rally, VIX has not really come down much and remains elevated.
For the self-directed retail investor, despite last week’s rally, all eleven sectors in the S&P 500 are down for the quarter. Longer term investors looking to add positions can still find plenty of opportunities with many stocks well off their highs. Short term traders can still benefit from high levels of volatility and the rich premium in options. As always, the most important thingsto keep in mind are sticking with your investment time horizon and objectives.