View from Toronto: Strategic Summary for Global Markets This Week
07/31/2017 2:51 am EST
We open dominated by manufacturing data which Bulls try (unsuccessfully) to keep the July 7 bounce alive. The back half of week we focus U.S. jobs & UK monetary policy. Both are likely to depict issues with inflation, suggests Ziad Jasani, in his weekly video today.
- Global Equity Markets: July 7 bounce in peril Global indices point downwards this week.
- Global Bond Markets relatively expensive, but weaker wage/price inflation data likely keep downward pressure on yields allowing Bonds:
SPDR Barclays Capital High Yield Bond ETF iShares Barclays 20+Year Treasury Bond ETF (TLT), iShares 3-7 Year Treasury Bond ETF (IEI), iShares Barclays 7-10 Year Treasury Bond ETF (IEF) to remain buoyant.
- However, high-yield SPDR Barclays Capital High Yield Bond ETF (JNK) and Corporate iShares iBoxx $ Investment Grade Corporate ETF (LQD) are challenged.
- Global Commodity Markets bounce running hot, more likely to swing-high on a rising U.S. dollar/euro (USD) back-half of week.
- Theme for the week: Front half of week dominated by manufacturing data which Bulls try (unsuccessfully) to use to keep the July 7 bounce alive.
- Back half of week focus US jobs & UK monetary policy, of which both are likely to depict issues with inflation.
- We are expecting S&P 500 (SPY) to move down and test its 50-Day Average (2,435), where if jobs report delivers, we bounce, otherwise we breakdown headed towards 2,400.
- The Toronto Stock Exchange (TSX) has up-side risk until the Commodity-bounce turns. (Inventories this week are likely to show builds).
- Broad-Decisions: Hold for mid-to-longer-term equity positions but get your stop-losses in, short-term look-short (Inverse ETFs) to open week, and then again to end week.
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