•   The action in the major indices has been relatively textbook over the last six weeks. 
• After breaking out of bottoming formations during May and June, the stock market took a much-needed breather.  As one would expect, leading stocks had the biggest drawdowns.
• The tech-heavy Nasdaq Composite saw a 9% decline off the July highs, while the S&P 500 only saw a 6% pullback.  Since then, both have seen a decent bounce.
• Earnings season was once again better than expected, although down year over year. The bright spot was Tech, which continues to see positive revenue and earnings growth.
• So far, the economic data continues to show progress, with inflation slowing and even the jobs market finally beginning to cool – albeit at a less noticeable rate. The hope of a soft landing is certainly alive and well.
• As always, history has shown that it is easy for the Fed to tighten financial conditions to slow the economy. The hard part is fine-tuning it so that it doesn’t result in an outright contraction.
• For now, the data is moving in a positive direction, delivering the Fed’s intended effect.
• The technical action in the market remains positive. As expected, the major indices pulled back. After getting oversold, they have bounced nicely over the last couple of weeks.
• The action after a pullback is worth watching closely. Such moves can often reveal clues to the health of the existing trend.  

CHURCHILL MANAGEMENT GROUP

Source: Churchill Management Group

info@churchillmanagement.com 

** This report is meant to inform the reader of our current market opinion, which we, as professional money managers, use in our decision-making. It should be noted that stock market and bond market data are subject to varying interpretations and any one interpretation will not necessarily guarantee investment success. The information obtained from the sources specified herein and used as basis for our current market opinion is believed reliable, but we do not guarantee the accuracy of such information.