Last week's holiday-shortened week saw a mix of ups and downs as investors questioned the strength of the reflation trade. Longer-dated yields sank, driven by fears of a risk-off environment, and the S&P 500 (SPY) looked to close down for the week for the first time in three weeks until a rally on Friday drove the markets to new records. This week, I expect to see some possible volatility as investors react to more economic data releases. Still, looking at the big picture, the next catalyst for the markets is earnings season, which starts tomorrow with the release of earnings reports for banks. I will preview earnings season and what that means for our portfolio, but first, let's look at the markets since Wednesday. Read on below….(Please enjoy this updated version of my weekly commentary from the POWR Value newsletter).
Stocks ended higher on Wednesday as investors digested the Fed's June meeting minutes. The release signaled a split on when to roll back crisis-era monetary policies. While some officials expected to start winding down bond purchases earlier than expected, others wanted to wait.
This news followed a labor report showing fewer workers quit their jobs in May, which means that a projected increase in job openings wasn't as significant as previously thought.