Bears Engulf A Week Of Data, Drama, And Doubt

MarketGauge
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Summary

  • Last week delivered a flood of market-moving events - earnings, economic data, fiscal policy moves, and political drama - but many were clouded or muted by controversy, contradiction, or doubt.
  • The week began with bullish momentum but ended in technical deterioration. Chart watchers would label the week a “bearish engulfing” pattern - where the weekly decline fully swallows the prior week’s gains - indicating a potential shift in trend.
  • Whether this marks a lasting turn or just a pause remains to be seen, but the message from price action was decisively risk-off.
  • If we look at the longer-term trend in earnings and expectations, the market has likely priced in expectations of declining growth rates from the Mag 7 and the other 493 S&P 500 stocks into this quarter and next.
  • There are reasons in the GDP data and the labor market data to be concerned about a slowing of the economy. The interest rate market suggests it sees this too.

silhouette form of bear on technical financial graph

monsitj

By Geoff Bysshe

It’s time to listen carefully to what the market is saying, get tactical, and prepare for better opportunities ahead.

Last week delivered a flood of market-moving events - earnings, economic data, fiscal policy moves, and political drama, but many were clouded

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