Market Notebook

Equity prices, as measured by ticker SPY, closed slightly lower last week, while bond prices, as measured by ticker BND, closed marginally higher.

From a technical analysis perspective, SPY and BND closed above their respective 20-day exponential moving averages and appeared to be in an area of price consolidation. This leaves open the possibility of purchases during the coming week.

Market participants stoked volatility this week as June CPI numbers came in higher than expected. Although June CPI data was stronger than expected, consider that important commodity prices, including oil, remain in a downward trend. Consider also that several companies have stopped or slowed hiring plans. It is quite possible that labor demand will move from overheating to more historically normal as time passes. As interest rate pressure from the Federal Reserve continues to mount, inflationary pressures may very well begin to abate.

With both equity and bond prices holding above the 20-day exponential moving average, purchases may be prudent depending upon portfolio construction and goals. Consider also that even if portfolios contain little or no cash, purchases can still be made by shifting assets among classes to take advantage of recent price declines.

All the best in 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.