The equities markets hit a bottom at the end of last week and may move higher this week but investors are urged to caution. The rebound, if one develops, will be the result of light trading volume during a holiday week and may set the market up for a big fall next week. Next week is the first of the Q2 peak earnings reporting season and it may bring bad news. The first important reports will come from the banking sector which should give insights into the health of the consumer. If consumer trends within the financial sector weaken we can only expect the same elsewhere in the economy.

The hurdle for the market this week will come on Friday with the June non-farm payroll report. The report is expected to show a slow-down in hiring coupled with another strong increase in wages that will up the ante in regard to the FOMC. The FOMC is expected to hike rates at an economy-crushing rate over the next two meetings and their pace could be increased if the inflation data continues to come in strong.