Equity markets advanced last week as the bear market rally gains momentum. The rally was driven by a trio of good news that amounts to news that is not as bad as expected or news that points to additional rate hikes this year. The takeaway is that the economy and the market remain in transition and will likely top out soon. The question is when and how bad the next correction will be. As it is, the S&P 500 could reach new all-time highs by the start of the peak Q2 reporting season.

This week will be a holiday-shortened week, with the 4th of July on Tuesday. The market volume will be light, but action may be volatile, specifically on Friday when the NFP report is released. The labor data should confirm that labor markets remain tight, but other data, such as wage gains and layoffs, may darken the picture.