Equities rebounded last week and closed near the high of the period after the NFP report came in better than expected. The NFP shows job gains were stronger than expected and dispelled some fear of recession but not all. The hourly wages also increased faster than expected and suggest inflation is yet to be tamed.

This week will be a challenging week for the market. On the economic front is the CPI, PPI, and Retail Sales data while on the earnings front reports from the Big Banks and key consumer staples like Pepsico and Conagra Brands. The takeaway from them all will be the outlook for the second half and how inflation will impact earnings growth. We're expecting the guidance to be weak, spark a round of downward revisions to earnings, and bring the S&P 500 down to a new low but we could be wrong. If the guidance for 2nd half earnings begins to brighten, the S&P 500 could begin to put in a real bottom.