Equity markets rebounded last week as investors began to embrace the new normal. The new normal is a time of high-interest rates, high inflation and tepid economic growth punctuated by the ups and downs of a rolling bear market. The S&P 500 gained more than 1.65% for the week and broke above the 4,150 level, which is significant. The move could lead to a higher high, possibly as high as 4,300, but a move higher than that is questionable.

The news of the week came out of the retail sector. Retail results are mixed, with consumers shifting toward staples and away from discretionary items and the big box diversified names are the only winners. Foot Locker, a purely discretionary name, not only gave a weak report but guided the entire year lower and that may be echoed this week when the 2nd half of the retail sector issues their reports.