It was a sizzling July – in fact, the best for stocks since 1939.  The month began with buyers focused on defensive names and finished with a flourish into growth names and some cyclical names.  Energy is the wildcard sector after monster earnings beats.

Follow the Money

Last week, more fund flowed into fixed income, but domestic equities continue to best international.

Here’s Comes August

July has a long-term reputation for being a strong month, but those summer days slow the action in August; and in midterm years, the market is usually down. History doesn’t have to repeat itself, but it’s good to know the trends.

Earnings season continues and should dominate the market until Friday’s jobs report.

Key earnings releases- I think Caterpillar (CAT) is the most important report this week.

Technical View

The S&P 500 and other indices are well above their 50-day moving average.  There is a chance they could reverse and test the same metric should things get dicey. Otherwise, there are clear hurdles up to their respective 200- day moving averages.