No real changes in trend in the S&P while I was gone.
The long Treasury is having some trouble. It closed below its 200 day moving average last Thursday (if it remains there through the close on Tuesday, it will revert from support to resistance) and the lower boundary of its very short term uptrend on Friday (if it remains there through the close today, the trend will be voided).
Gold continues to be unable to get out of its own way. Of course, higher yields didn’t help.
The dollar is also having problems. Usually rising rates help the dollar---or vice versa.
The VIX was a bit more volatile last week; but remains at a very subdued level.
The overall economic data the week of June 26 was negative though the primary indicators were a plus. I score it a neutral. The week of July 3 the stats were mixed but the primary indicators were quite negative. I score it a negative. In the last 91 weeks, twenty-eight were positive, fifty negative and thirteen neutral.
Not much occurred on the political front. The senate continues unable to pass healthcare reform. However, there was a positive headline on trade out of the G20 meeting.
On the monetary policy, the Fed remains slightly on the hawkish side, suggesting that it was never data dependent. The ECB took a page from the Fed playbook, sending out both dovish and hawkish statements.
Bottom line: the numbers continue to suggest a weak if not faltering economy. The only one helping fiscal policy is Trump. And the Fed has already failed (once again) in returning monetary policy to normal on a timely basis. The only question is what price the economy and asset prices will pay.
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