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Stock Market Outlook
For The Week Of July 6th = Uptrend

INDICATORS

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

ANALYSIS

The stock market outlook shows a continuing uptrend for U.S. equities.

The S&P500 ( $SPX ) gained 1.7% last week.  The index sits ~7% above the 50-day moving average and ~8% above the 200-day moving average.

All three technical indicators remain bullish heading into the week, with the index showing strong price action since the quarterly option expiration on June 23.

Technical analysis of daily SPX prices

SPX Technical Analysis - July 06 2025

PERFORMANCE COMPARISONS

A positive week across all sectors last week, with Materials ( $XLB ) leading the pack, and Utilities ( $XLU ) bringing up the rear.  Consumer Staples ( $XLP ) and Healthcare ( $XLV ) rejoined the other sectors with bullish bias.

Weekly price performance of S&P500 sector ETFs

S&P500 Sector Performance - July 06 2025

All sector styles were green last week as well, with small cap value ( $IWN ) and Momentum ( $MTUM ) bookending performance.  No bias changes last week, all the styles remain bullish.

Weekly price performance by sector style

S&P500 Sector Style Performance - July 06 2025

Oil and Equities ( $USO & $SPY ) outperformed other asset classes, while bonds ( $IEF ) lost some ground.  Oil and Gold ( $USO & $GLD ) returned to bullish bias (from neutral); bonds returned to neutral.

Weekly price performance by asset class

Asset Class Performance - July 06 2025

COMMENTARY

The summer trading season is here and that normally brings lower trading volumes and fewer "big" moves in the indexes. This year may be different, if the first half was any indicator.

No signs of weakness in the labor market yet, with JOLTs / NFP data surprisingly positive.  Both Manufacturing and Services PMI's were slightly higher as well.  Both of these data points pushed estimates for FOMC rate cuts further into the future.

The U.S. Congress passed its latest tax and spending bill, which is heavier on spending than taxes and likely has a stimulative effect on the economy in the near-term.

This week lacks major macroeconomic data, but expect a flurry of headlines nonetheless, since the 90-day tariff "pause" ends mid-week. On Monday, the U.S. begins informing other countries of the tariff rate on their imports, set to start on August 1. The U.S. reached an agreement with Vietnam last week, but most other countries are in some stage of agreeing to agree on frameworks. The situation probably isn't resolved soon; Treasury Secretary Scott Bessent implied the goal is to be done with trade deals by Labor 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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