Market Notebook

PRICE ACTION:
Equity prices, as measured by the ticker SPY, closed lower while bond prices, as measured by the ticker BND, closed higher over the last week.

SPY    -1.50%
BND    -0.93%

TECHNICAL ANALYSIS:
SPY price appears to be in a range-bound consolidation approaching the lower bound of the recent range.

The BND price has broken below what could be considered the lower bound of the recent area of price consolidation, potentially signaling the start of a downward trend.

SENTIMENT:
Price action suggests negative sentiment associated with the military action against Iran. Negative sentiment will likely remain bearish over the short term if tensions continue. The price of oil and the corresponding impact on inflation in the U.S. are front and center in market participants’ minds.

ECONOMY AND FUNDAMENTALS:
Economic fundamentals remain positive, with data suggesting the U.S. economy remains resilient. The Federal Reserve appears to be acting appropriately, with two goals in mind: keeping inflation under control and supporting real economic activity.

The most significant structural concerns regarding economic activity relate to the energy complex. It seems likely that the global oil flow will be adversely affected by recent tensions. Over time, this could lead to higher energy prices and inflation.

All the best during the week ahead!

Disclaimer: Nothing in this discussion should be considered investment advice. The content of this discussion is strictly my personal opinion and subject to change at a moment’s notice. Investment advice can only be provided to you by your investment professional and not by a general market discussion such as this one. If you wish to speak with an investment advisor, contact us. We can probably help.