Q3 begins!
Get ready, the first week is already fun packed!
Quick summary:
Today marks the start of our Q3 Competition! We've returned from our 4th of July break and are excited to get going. Thanks for your patience—let the excitement begin!
Despite a shortened trading week due to the Independence Day holiday, the S&P 500 index demonstrated positive momentum last week, closing at another all-time-high of 5567.20.
A lot of things on the agenda this week. Today and tomorrow we have Jerome Powell's testimony in front of Congress, on Thursday (before open) we get the new CPI numbers for June, and on Friday (before open) the PPI numbers. But that’s not all, earnings season is starting. This week we get the big bank earnings on Friday: JP Morgan, Wells Fargo, Citi, and BNY Mellon.
On Saturday, we’ll dig a bit deeper into this week’s data to see how it fits into our three potential macro scenarios, plus discuss the implications for the upcoming earnings season.
The Q3 competition
NOTE: The payment of prizes for the Q2 winners will start going out this week. If you haven’t yet responded to our email requesting payment information, please do, so that we can send out your well-deserved reward.
The Q3 competition is now open! This is the perfect time for anyone who wanted to enter or missed their chance last quarter. The more you play, the better your odds of taking home our cash prizes.
Just a reminder, for those unfamiliar, each of the top 20 get awarded a cash prize, with the total winnings summed up to $5,000. First place gets $1,000, second $600, third $400, and so on. Places 11 to 20 get $100 each.
The best strategy is to start immediately and be consistent. If the markets are running away from you in the first few weeks, don’t lose hope! We’ve seen some people overturn an initial deficit in the final few weeks of a quarter.
We look forward to having you participate!
NOTE: For all those new to the whole thing, read more about it here or watch a video of Scott and myself guiding you through the survey, showing you all its features, and briefly explaining how the competition works.
Last week’s performance
Last week, markets operated on a shortened schedule due to the the July 4th holiday, plus an early close on Wednesday. Key events included Jerome Powell's remarks at a European Central Bank conference and the release of the Fed's June meeting minutes, offering insights into inflation and monetary policies. The labor market also drew attention with the June jobs report on Friday showing strong employment growth following May's addition of 272,000 jobs, alongside data on job openings and private payrolls. Unemployment went up by 0.1 percentage points, but this wasn’t much of a concern.
And just as we were sitting this one out, markets go up in a straight line :)
SPX closed at yet another all-time-high of 5567.20. In low volume weeks, markets either gradually creep up, or trade sideways. Last week was a gradual grind up. Nice and easy.
This week, the focus shifts to Powell's Congressional testimony, but much more important will be the two new data prints on inflation: the CPI on Thursday and PPI on Friday. If the inflation trends continue as expected, the rally should continue, in the same fashion as we’ve discussed before: a shot up, followed by a consolidation for a few days.
But if inflation starts to go up again, as it has in Canada, for example, then we might get the correction everyone is so eagerly anticipating (at least, everyone in my feed!).
Earnings data will play a role as well in the upcoming weeks. Any weakness here will also imply that we should start fading this rally, but continued strength means another squeeze up, where the 5,800 or even 6,000 targets for the end-of-year SPX are not as unreasonable as they seemed at the beginning of this year.
So in conclusion, let’s see the data first and then we can think about earnings projections. I’ll give you an overview of my expectations on Saturday.
In terms of predictions, think about what the inflation data might be, and this will give you a good idea of where markets will end up.
Welcome back, and good luck!
…join the $20,000 competition!
Join our survey competition to get an opportunity to participate in our quarterly ($5000) and annual (3% of our profits) prize distributions:
DISCLAIMER: Neither the survey nor any of the contents of this website can act as investment advice of any kind. The results of the survey need not correspond to actual market preferences or trends, so they should be interpreted with caution. Oraclum Capital, LLC (Henceforth ORCA) is a management company responsible for running the ORCA BASON Fund, LP, and for organizing a survey competition each week, where it invites the subscribers to its newsletter (this website) to participate in an ongoing prediction competition. The information presented on this website and through the survey competition should under no circumstances be used to solicit any investment advice, nor is it allowed to be of commercial use to any of its readers. The survey and this website contain no information that a user may use as financial or investment advice. All rights reserved. Oraclum Capital LLC.
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