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Inventory Market Outlook coming into the Week of August third = Uptrend
- Common Directional Index: Impartial
- Institutional Exercise: Uptrend
- On Stability Quantity: Uptrend
ANALYSIS
The inventory market outlook stays in an uptrend for U.S. equities, though excessive quantity promoting and bearish bias shifts are cautionary indicators.
The S&P500 ( $SPX ) fell 2.4%. The index sits ~2% above the 50-day shifting common and ~6% above the 200-day shifting common.
The ADX directional indicators are on the verge of a cross-over (i.e impartial), however the different two alerts stay bullish coming into the week.
SPX Worth & Quantity Chart for Aug 03 2025
PERFORMANCE COMPARISONS
The Utilities sector ( $XLU ) was the one gainer final week; Supplies ( $XLB ) led to the draw back. Client Discretionary, Vitality, and Financials ( $XLY, $XLE, $XLF ) downshifted to impartial bias, whereas Staples, Healthcare, Supplies, and Actual Property ( $XLP, $XLV, $XLB, $XLRE ) all dropped to bearish.
S&P Sector Efficiency from Week 31 of 2025
All sector kinds had been decrease final week; Momentum ( $MTUM ) escaped with the least harm, whereas Small Cap Worth ( $IWN ) was hardest hit. Low Beta, Small/Mid/Giant Cap Worth, and Excessive Dividend ( $SPLV, $IWN, $IJJ, $IWX, $SPHD ) fell to impartial bias.
Sector Model Efficiency from Week 31 of 2025
Oil ( $USO ) outperformed different belongings and Bitcoin ( $IBIT ) underperformed. Oil, gold, and bonds ( $USO, $GLD, $IEF ) all returned to bullish bias, and the U.S. greenback ( $DXY ) improved to impartial.
Asset Class Efficiency from Week 31 2025
COMMENTARY
U.S. equities weren’t a fan of the macro knowledge dump. June job openings (JOLTs) fell barely and missed expectations, however not by a lot. The primary Q2 GDP estimate got here in at 3%, which is unchanged 12 months over 12 months, however above expectations and considerably higher than final quarter’s learn.
So it’s not all that stunning the FOMC held charges regular, citing a low unemployment fee, considerably elevated inflation, and protracted uncertainty concerning the financial outlook (i.e. affect of tariffs).
The next PCE knowledge launch confirmed inflation rising in June (on a 12 months over 12 months foundation), and that’s after an upward adjustment of 0.2% to Could’s Headline and Core figures.
| PCE (y/y) | Precise | Prior |
Anticipated |
| Headline | +2.6% | +2.4%* | +2.5% |
| Core | +2.8% | +2.8%* | +2.7% |
We proceed to see a sample of prior core and headline PCE knowledge revised larger the next month…not sufficient to affect coverage, however definitely sufficient to start out asking questions.
Enter July Non-Farm Payrolls. Friday’s NFP knowledge confirmed a rise of 73,000 jobs in July, effectively under expectations of 110,000. Not nice, however not terrible both. The report additionally revised June and July figures as effectively:
- June payroll knowledge was lowered from 147K to 14K ( -90% )
- Could payroll knowledge was lowered from 144k to 19k ( -87% )
These are large revisions, and factors out a weaker labor market than the one used to set coverage. Granted, NFP is only a directionally appropriate estimate, derived from small surveys and fashions every month. However even the upper accuracy, decrease velocity knowledge (Quarterly Census of Employment and Wages or QCEW) exhibits a rising rift with NFP estimates, which all means that even “directionally appropriate” could also be a stretch.
So what’s a protected investor purported to do? Watch asset costs and use basic/macro knowledge as affirmation. The breakout in bonds (i.e. charges down) and the U.S. greenback is a deflationary sign, however fairness indexes are nonetheless bullish.
Within the meantime, when sectors, kinds, or asset lessons downshift into bearish bias, it’s time to regulate their respective place sizes. On the very least, dropping the place to your minimal measurement is warranted, whereas exiting the place all collectively is a safer play, particularly if the ticker lined by multiple class (e.g. $XLP and $SPLV).
Greatest to Your Week!
P.S. If you happen to discover this analysis useful, please inform a buddy.
If you happen to don’t, inform an enemy.
Sources: Bloomberg, CNBC, Federal Reserve Financial institution of St. Louis, Hedgeye, Stockcharts.com, TradingEconomics.com, U.S. Bureau of Financial Evaluation, U.S. Bureau of Labor Statistics
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