The S&P 500 and other indexes experienced a significant turnaround rally last week, gaining some 3%. And while this is certainly welcomed news, we caution investors from becoming too complacent. Initial fears relating to the British referendum vote to exit the European Union may well have been overblown, but remember “you can’t un-ring a bell,” and the forces that have been set in motion are unlikely to dissipate soon. When taking into account last week’s rally, there are plenty of warning signs coming from the market. The U.S. 10 Year Treasury is yield 1 ½%, German Bunds have a negative yield, Gold continues to rise, and financial shares just ended one of their worst quarters since the (end?) of the financial crisis.
We continue to expect the year to end with gains, however we caution investors from becoming complacent or taking on too much risk.
Looking Ahead: This Week’s Market Moving Events
- Tuesday: Euro block PMI, U.S. Factory Orders, Consumer Spending
- Wednesday: International Trade, Job Creation Index, Redbook Report, PMI & ISM Manufacturing data, FOMC Minutes
- Thursday: ECB Minutes, Jobless Claims. PepsiCo (PEP) reports earnings
- Friday: June Employment Report