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Stock Market Outlook
For The Week Of June 29th = Uptrend

INDICATORS

    ADX Directional Indicators: Uptrend
    Institutional Activity (Price & Volume): Uptrend
    On Balance Volume Indicator: Uptrend

ANALYSIS

The stock market outlook continues to show an uptrend in place, with equity indexes returning to all time highs.

The S&P500 ( $SPX ) gained 3.4% last week.  The index sits ~6% above the 50-day moving average and ~6% above the 200-day moving average.

Technical analysis of daily SPX prices

SPX Technical Analysis - June 29 2025

All three technical indicators are bullish after last week's price and volume action.

PERFORMANCE COMPARISONS

The Communications sector ( $XLC ) led to the upside with Technology ( $XLK ) a close second, thanks to Mag 7 companies.  After recently leading stocks higher, Energy ( $XLE ) sold off with oil prices.  No changes in bias last week.

Weekly price performance of S&P500 sector ETFs

S&P500 Sector Performance - June 29 2025

All styles gained ground last week, with High Beta ( $SPHB ) leading the way and High Dividend ( $SPHD ) bringing up the rear.  Low Beta and High Dividend styles ( $SPLV & $SPHD ) bounced back to bullish bias.

Weekly price performance by sector style

S&P500 Sector Style Performance - June 29 2025

Bitcoin and Equities ( $IBIT & $SPY ) outperforming other asset classes, reflecting a risk-on environment.  Oil ( $USO ) cratered, falling almost 12% and giving back a little more than half of it's gain over the past 4 weeks.  Oil and Gold ( $USO & $GLD ) retreated to neutral bias, while bonds ( $IEF ) make another swing into bullish territory.

Weekly price performance by asset class

Asset Class Performance - June 29 2025

COMMENTARY

Geopolitical headlines continue to drive market volatility as we close out the June and the second quarter. Conflict deescalation and easing tensions in the Middle East mitigated the recent spike in oil prices, while social media posts concerning trade deals with Canada and China caused large, intraday price swings in equities. This environment will extend into early July, at least, as markets key-in on the expiring suspension of "Liberation Day" tariffs.

Federal Reserve Chairman Powell testified before Congress last week, focusing on the potential inflation in response to tariffs. He repeated recent comments that the FOMC well-positioned to wait and see how the economy responds before making a decision on interest rates.

Durable goods orders spiked in May, rising 16.4%, after dropping ~7% in April, highlighting tariff uncertainty moving through supply chains.

PCE showed inflation rising in 0.1% in May, and that's after an upward adjustment of 0.1% to April's Headline and Core figures.

PCE (y/y) Actual Prior Expected
Headline +2.3% +2.2%* +2.3%
Core +2.7% +2.6%* +2.7%

And finally, the third Q1 GDP revision shows the economy contracted by 0.5% in the first quarter, down from the second estimate at -0.2%, and falling 1.1% year-over-year. The final estimate was weaker as a result of downward revisions to consumer spending and exports.

A short trading week ahead, with U.S. markets closing early on Thursday and completely on Friday for Independence Day.

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don't, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics



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