We finally begin to get some earnings results for Q2 this week and, more importantly, guidance for Q3. We’ve certainly been told for the last two weeks that everything is terrible and we’re either heading into or in a Recession or already in one, etc. etc. and now we’ll see if that matches up with the data we get from the actual companies who are doing business in this economy.
We have a lot of bullish bets on the table but also a lot of hedges but, on the whole, we’d rather see positive developments than negative ones. Either way, we should have a bit clearer picture of what lies ahead by the end of the month.
Other economic data this week is sparse – just some housing data with the Philly Fed and PMI towards the end of the week and no Fed speak as there is a meeting next week so it’s all about earnings until then.
Goldman Sachs (GS) already delivered a 10% beat and we hope to see some more – especially as we are at such a critical technical juncture on the S&P 500. As I’ve been saying all month, we have this positive MACD tailwind and if all we can do is hold the weak bounce line – it does not bode well for what will happen after the Fed meeting next week – especially if they tighten more than expected.
That 50-day moving average is going to be very hard to cross if we blow this opportunity so 3,936 is the goal for this week – otherwise we could easily end up looking like late May/early June – when we were rejected at the 50 dma and took a 10% plunge in short order.
That’s led to a month of media negativity and the good news about that is that analysts will be tripping over themselves to upgrade targets if they are proven wrong on reports like the one GS just put up – even though GS was one of the analysts telling people we were plunging into a Recession. Of course GS is famous for telling Retail Investors one thing while telling their own clients something completely different – they are just evil like that…
Not a whole lot happened over the weekend – we’ll have to see how today goes:
- US Risks Talking Itself Into a Recession, Moody’s Economist Says
- Fed Prepares to Lift Rates Another 0.75 Percentage Point
- IMF to Cut Global Growth Outlook ‘Substantially’ at Next Review.
- Global Housing Boom Fades as Rates Climb
- These Are The Countries With The Highest Default Risk
- World’s Rate Laggards at ECB and BOJ Take Center Stage: Eco Week
- New Zealand Inflation Outpaces Forecasts at Fresh 32-Year High
- Sasol Outage Means All South African Oil Refineries Are Now Shut.
- The West’s Climate Policy Debacle
