It has been a calm and, from a trading perspective, boring week. The SPX is now at a forward P/E 21. That suggests that all good news are priced in. Inflation was pretty much as expected. It seems we have a market that appears to be healthy and unconcerned. The focus is not on inflation right now, more on employment data. There will probably be a 0.25 ratecut in September and a 0.50 cut is expected by 30% according to the Bloomberg probability data. S&P 500 is close to ATH but still no new high, instead it is moving sideways just below. There is no need to try to predict anything here just continue looking for opportunities in the stockmarket.
In macroperspective the liquidity that has been injected in the economy continues to support the stockmarket. Especially the financial sector that we now see improving. The Basel III that is strenghtening the regulation, supervision and risk management of international active banks has been revised and requires banks to have a certain amount of capital in less risky assets like gold and this makes the banks more solid. Meassures to deal with irregularities in the market are better now than at the 2007-2009 crises. Banks and Financial Sector is in good condition.
This is a weekly chart of the ETF: XLF showing the trend.
This weekly chart of BRKB Berkshire Hathaway is in same strong uptrend.
SX30 Financial Services Sector in confirmed uptrend.
The Sectors: We still await a positive Weekly in Basic Materials and Energy Sectors. Long Monthly is positive and also Daily.
Consumer Cyclical and Technology Sectors showing some weakness this week but they are still positive. Technology is supported by riskcapital as it has been for a long time.
Real Estate Sector is positive in all timeframes.
Consumer Defensive Sector, Utilities Sector, Healthcare Sector, Communications Services Sector are all positive and provides opportunities for trading.
Industrials Sector is new in positive Weekly and we will inspect this sector and look for trading as well as in the Financial Services Sector.
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