After annual gains of over 13%, 29%, and 11% over the last three years, the S&P 500 stands at a year-to-date gain of 2.36% roughly half way through the year. The 40 year average is 10.18%. Once again, we find ourselves back into the middle of a range that has been in force since February. After seemingly many recent large issues such as Greece, interest rates, a Supreme Court ruling on Healthcare, an Iranian Nuclear Deal, and currency fluctuations, we somehow ended up pretty much where we started. Meanwhile valuations are running at about 10% above average, and the sentiment is cautious. There is a saying that “as goes January, so goes the year”, and guess what January did? It chopped around in a range and ended up pretty much where it started. Hmmm. Advanced options traders have ways to win in exactly this kind of market. To learn more about this, click here: http://www.optionsuniversity.com
After spiking briefly above 20, the CBOE Volatility index has settled down considerably back to the low end of its range.
OVERSEAS: Despite riots in the street, the Greek parliament has approved austerity measures, as it appears a deal is moving forward. Stocks are broadly positive around the globe as a result. This is a welcome relief particularly in major Chinese markets that had been hit hard earlier this week.
OIL: With refineries cranking at over 95% of capacity, crude inventories have managed to continue their gradual downward trend. Lower pump prices are fueling increased demand for gas. However, some are speculating that the Iranian nuclear deal could increase the global availability of crude, so oil prices have remained soft nearing $50 per barrel.
JOBS: Many eyes are on jobless claims, particularly because of Janet Yellin’s comments that jobs will be key in determining rate hike timing. Analysts went into this week with an expectation of about 282K new jobless claims after an unexpectedly high number of 297K the previous week. This week’s ACTUAL number of new claims came in at 281K, a positive sign that perhaps we will continue down the path of fewer people being recently unemployed.
RETAIL: Retail sales for June were surprisingly weak, as consumers seem to be minding their budgets. The weakness was very broad-based, affecting many industries. Vehicles sales were not the least of the businesses affected.
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