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Weekly Memorandum 8/1/2022

The equity rebound continued, and we just barely closed above a key resistance level on Friday in the S&P. The Nasdaq continued to lead the way, which is a good signal, but now that we're testing resistance again, don't be surprised to see some sellers pop back in soon. The leaders last week were energy and utilities, somewhat of a cautionary signal, but tech and consumer discretionary put in positive returns too.

Bond markets continued their rally as rates came down. If we see a multi-month relief rally in capital markets, it could turn into another tailwind for the real estate sector, which has slowed notably since interest rates have risen. This will likely only add to inflationary pressures in the housing market in time.

U.S. Dollar continues its mild correction, while Crude Oil is consolidating near the lows. Looking for one more drop in energy markets before a more sustained rally begins. The big news last week was in precious metals, which saw gold and silver explode higher. With silver leading the way now, we could see a more explosive rally. Cryptocurrencies continued their counter-trend move, and we updated readers on our sector outlook in yesterday's Mercator Crypto report.

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