Good Morning,
Happy Monday! This time next week, school buses will be back on the road. Summer goes by too quickly!
Markets opened mixed to lower following last week's economic data, which reinforced the disinflation narrative. Key inflation reports came in at or below expectations, while softer retail sales data helped ease concerns about additional Fed rate hikes despite persistently elevated oil prices.
This week, the focus shifts to consumer and growth-related earnings, with reports from Home Depot (Tuesday), Target (Wednesday), and Walmart (Thursday) providing important insight into the health of consumer demand. In addition, the release of the Fed minutes (Wednesday), global PMI data (Friday), and continued developments surrounding AI-related spending and earnings will help determine whether strong underlying fundamentals can continue to offset concerns regarding higher oil prices and elevated long-term Treasury yields.
My attention is beginning to shift toward the upcoming holiday shopping season and how consumers may respond to sustained higher gas prices. At the moment, softer economic data can actually be supportive of the market if it leads to lower rate hike expectations. However, a weaker holiday spending season could challenge that narrative. Time will tell, but for now I will be closely monitoring developments out of Iran and next week's Nvidia earnings report, both of which have the potential to serve as key market catalysts.
As always, please don't hesitate to reach out with any questions or comments.
Attached is this week's Market Strategy Radar Screen Report from John Stoltzfus, Chief Investment Strategist at Oppenheimer Asset Management.
Have a great week!