Stocks rose sharply again on Friday, with the climbing by around 1.4%. The rally probably isn’t over yet, especially since we have seen a significant inflow of liquidity in the last two weeks, as conditions to obtain margin have eased. Until we see some financial condition tightening, markets can continue to rise. So, watching liquidity measures and financial conditions is key to this market.
At this point, I am looking for the S&P 500 to rally a bit further, perhaps up to 4,335 over the next couple of weeks.
Additionally, it is worth noting that typically on the first few days of the month, monthly inflows tend to help lift markets as well.
Nothing fundamentally has changed in the market, but stocks will not go straight down, and with moving lower, stocks can get a boost. I still think we will see 3,200 to 3,300 over the long term. Especially when one of the Fed’s most dovish board members, Neel Kashkari, is calling for a 50 bps rate hike at the September meeting and says the “Fed still has a long way to go.”
S&P 500 Index Daily Chart
It is a similar outlook for the Invesco QQQ Trust (NASDAQ:), with room for the ETF to climb to around $340.
QQQ Daily Chart
Another reason indexes have been rising is that real yields have been falling, and as long as the TIP continues to push up, so will equities push higher too. At this point, I could see the iShares TIPS Bond ETF (NYSE:) rising to around $120.
TIP Daily Chart
prices have been moving steadily higher. Rising commodity prices will negatively affect markets because it will help push inflation expectations. But for now, it may not matter. If Copper can clear $3.60, it can probably push up to around $3.75.
Copper Futures 1-Hr Chart
Higher copper prices are good for Freeport-McMoran (NYSE:), and with the stock nearing resistance at $31.70, there is an opportunity for shares to move higher and fill the gap around $34.10.
Freeport-McMoran 1-Hr Chart
Exxon Mobil (NYSE:) moved up some last week, and with a gap to fill around $100.5, the stock probably has further upside.
Exxon Mobil Daily Chart
Block (NYSE:) has some solid bullish momentum based on the RSI, and the next significant level of resistance comes at $83.30, so there is more room to run higher.
Block, Inc. Daily Chart
Roblox (NYSE:) continues to push higher, and perhaps momentum for the stock has finally turned. The RSI is still steadily trending higher, and if resistance at $45 manages to give way, then the shares can climb higher to around $54.
Roblox Corp. Daily Chart
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