Insights

Yields moved lower across the curve in accordance with the weaker CPI reading, triggering ETFsector.com’s short covering signal for the XLK. With an upside break-out to all-time highs for the S&P 500 and a break in the uptrend channel for the US 10yr Yield the table is set for Growth oriented sectors to outperform.

US equities broke out of their 2-day holding pattern in a positive way with the Nasdaq pacing the major benchmarks gaining 75 bps while the S&P 500 picked up 48bps and the Dow lagged with a gain of 32 bps.  It was a big day for small cap. Stocks with the Russell 2000 index up

Monday opens as a slow day on the economic and earnings calendar.  Investors in both the stock and bond market are likely looking ahead to Wednesday’s CPI print for the latest data point on inflation with wall street strategists starting to back off calls for rate cuts in the 2nd half of the year on predictions of sticky inflation.  Asian stocks are also signaling a sluggish start to the weak as demand figures came in light and some signs of a slowing economy state side. 

Thursday saw equities continue to build value as rates edge lower.  The Dow paced the major benchmarks at +85bps while S&P 500 added +51 bps and the Nasdaq Composite lagged at +27 bps.

The S&P 500 finished Wednesday flat while the Dow was up 44bps and the Nasdaq was off -10bps. Thursday features monthly initial jobless claims and continuing claims releases before the bell.