Analyst expectations for next week’s economic numbers are optimistic.

PRE-OPEN MARKET COMMENTS FRIDAY – The market is preparing for a heavy news cycle next week and we will get hit on every front (earnings, economic and monetary policy). Traders are not going to take any large positions ahead of that news so the action should be dead today. Wait for dips and buy on support. Take modest gains and wait for another dip. That is how I would approach trading today. The market is flat overnight and overseas markets have a slight negative bias.

The big economic number next week is Advanced GDP and I am seeing forecasts in the 2% range. There is a fairly substantial variance between the NY Fed (1.7%) and the Atlanta Fed (2.4%). From my perspective, anything above 2% would be excellent and that would represent a huge rebound from -.5% in Q1. A strong reading would be consistent with the market rebound. Some of the growth will be related to tariff front running so it could be inflated.

Of course the jobs report will also be important. Last month’s report was much better than expected, but that was due to seasonal government employment on a state and local level. We should not expect strong government employment for a second straight month and the private sector will need to improve substantially from the 70K in June. ADP will be released Wednesday and that will give us some insight on the private sector. Initial jobless claims have been coming down in recent weeks so that bodes well for the overall number. I would consider anything above 150K to be market friendly.

The FOMC statement is next week and Trump is trying to push Powell to cut rates. Both met at yesterday at the Federal Reserve construction site and there was no mincing of words. Based on Bessant and Trump’s comments it sounds like Powell will remain the Fed Chairman for his entire term which ends in May.

Economic conditions are not robust, but they are not falling apart either. Even with higher interest rates, job growth has remained steady. We’ll see how Q2 GDP comes in next week.

Mega cap tech earnings are scheduled for Wednesday (META and MSFT) and Thursday (AAPL and AMZN). So far, the reaction has been a bit negative for tech stocks. ASML, TXN and TSLA were weak, GOOG was flat and $TSM was up. The results will be good, but will they be good enough to justify current valuations? The bar has been lowered in the last few months so there should be many “beats”. Massive investments in AI have been “tolerated” because it is the “next big thing”. That excitement can sour at anytime when there’s nothing to show for the capital outlay.

The August 1st trade deadline is next week and we will find out who is NOT at the bargaining table because they will have their tariffs jacked up. The others will continue negotiating.

I’m taking time off next week and when I scheduled time off I felt guilty about it. This is a major news window and I won’t be around for it. The timing was good for everyone else so I went with it. As I thought more about it, this might actually be good. Much of next week the market will be spent waiting for news. It’s always waiting for the next catalyst. Given the news cycle, it could take a few days for the real reaction to reveal itself and I will be back for that.

The last two years I have taken time off after the news cycle. Both years I missed really nice market drops when I was gone.

Look for rather dull trading the next few days. The action will pick up after Q2 GDP next week and it should continue through Friday.

I would be particularly interested in a gap up that reverses on heavy volume and that leaves a bearish engulfing candle on the D1 chart. I don’t know that we will get that, but it would interest me since it would likely signal a short-term top.

Support is at the low from yesterday and resistance is the high.

Trade well.