In his Daily Market Notes report to investors, Louis Navellier wrote:
Here comes the biggest earnings week of the season, plus the Fed’s next increase.
Consumer Discretionary And Tech Sectors Lead
The assessment of the trends for the overall US economy will be set in a big way this week. What the market has done in July reveals that expectations remain high with the NASDAQ up 7.3% for the month, the Dow up 3.7%, and the S&P 500 up 4.7%. Consumer discretionary and tech sectors have led the way. July is already the best month of the year for stocks and the best month since November 2020 for the NASDAQ.
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Anticipating Fed's Moves
Besides earnings, we also will see new home sales on Tuesday, the Fed decision and durable goods on Wednesday, unemployment claims and GDP on Thursday, and personal spending, PCE, and employment cost index on Friday. It's a lot to consume and may have crosscurrents offsetting each other.
The Fed's move and comments around these economic data are the most powerful single element of the week. Uncertainty is high as to the Fed's willingness to keep tightening if the economy slows significantly, with many forecasts projecting that the Fed will reverse and start cutting rates by the summer of '23 as the economy slows and inflation wanes.
Expect Volatiliy
Today we're seeing the semiconductor group off 1.5%, giving back some strong recent gains, giving the NASDAQ a modest loss, the S&P is flat and the Dow is up less than 100 points.The VIX remains below 24. Crude oil is up 40 cts to $95 and natural gas is up 2.5% to $8.40 and has been rising all month. Interest rates have bounced off their Friday month low with the US 10-year up 5bps to 2.84% and the yield curve is still inverted with the 2-year up 4bps to 3.03%.
Buckle up and get ready for a flood of new, important information and a lot of potential volatility. Prepare to move quickly if the sentiment for the week is generally positive and propels the market to further gains in July.
Coffee Beans
Research in Australia, Canada, India, Singapore, the United Kingdom and the United States by McKinsey & Company reveals that of employees that chose to quit their jobs from April 2020 to April 2022, 65% did not so far return to the same industry. Source: Statista. See the full story here.
