Jul 01, 2021
Equity markets closed out the first half of the year with a whimper. The S&P 500 gained less than 0.25% at the height of the session but did manage to set a new all-time high. The index gained a little bit more than 8% over the last three months and looks poised to set new highs again in the coming quarter. The risk for the market now is momentum. The MACD momentum indicator is diverging from the new high and suggests underlying weakness within the market. Without some new Catalyst to drive sentiment the risk of a market correction grows daily.
The next possible catalyst is Friday's NFP report. The June read of the ADP report suggests strong job creations in June if less than the expected 1 million new jobs. If the non-farm payrolls report echoes the sentiment the market will most likely move higher.