The market has been able to shrug off lowered GDP growth for two quarters in a row, and following Friday's impressive jobs report, much of the market continued to rise steadily into the close of last week.
The NASDAQ and small caps led the week's gains in stocks last week. The QQQs saw 1.99% weekly gains and small caps (IWM) returned 1.9% over the last week. The GLD saw a 0.73% rise, while the SPY rose 0.36%.
It seems premature for anyone to celebrate just yet. Many geopolitical realities remain, such as the war in Ukraine and uncertainty about Taiwan. More economic data will be released this week and the inverted yield curve is still signaling financial trouble ahead.
More economic data such as next week's Consumer Price Index on August 10 will catalyze further downside if inflation isn't under control – or potentially thrust stocks upwards if inflation seems to be peaking.
As subscribers know, Mish is investing and holding gold via the ETF (GLD), and at the same time, another core position she is holding is the ARKK Innovation ETF (ARKK). ARKK rose nearly 11% last week (10.95%) compared to the Vanguard Growth Index (VUG), which only rose 1.94%.
Friday's spectacular jobs report might signal an economic recovery is underway, or at least a deep recession might be avoided. The rally began in mid-June and has shown resolve despite mixed economic headlines.
Corporate earnings performing better than feared has helped push the market higher and led to a decline in the VIX (a common fear gauge) to levels not seen since April.
However, as Mish wrote late last week, investing in an inflationary environment can be challenging, and the SPY and IWM are now up against the resistance of their June swing highs.
The report led to the SPY and QQQ closing modestly lower on Friday, but five of the six members of the Modern Family, XRT, IWM, IBB, IYT and KRE closed at new highs for the recent rally.
With all six members of the Modern Family at or near significant resistance levels, and the much anticipated CPI report on Wednesday, it should be an interesting week.
ETF Summary
S&P 500 (SPY) 415.22 now resistance with support at 410.67
Russell 2000 (IWM) 192.17 the resistance with support at 188.31.
Dow (DIA) 329.14 resistance and support at 325.87.
NASDAQ (QQQ) 324.27 first level of resistance and support at 318.82.
KRE (Regional Banks) 64.54 key resistance, support level at 63.26.
SMH (Semiconductors) 246.07 resistance and support at 240.63.
IYT (Transportation) 240.66 key resistance and support at 236.82.
IBB (Biotechnology) 132.80 resistance point and 128.83 is support.
XRT (Retail) 67.76 resistance point and with support is at 65.50.