Equity markets advanced on Monday, starting the week on solid footing ahead of key economic data. Top of the list is the Retail Sales figures expected to show gains versus the previous month and last year. The caveat is that retail sales are expected to grow only 0.3% which is only slightly better than inflation. At this pace, underlying demand is barely growing and compounded by higher prices. With the Fed slated to hike rates at least another 25 bps, there is a risk that demand could turn negative and bring the economy down.

The S&P 500 continues its upward march. The index gained over 0.30% at the session's high to hit a new 1-year closing high. The index looks set to retest resistance near 4,660 and could reach that level within weeks. The question is what the market will do then, which could come down to the outlook for earnings. The FOMC is expected to hike rates, but if the outlook for 2nd half earnings improves, the market will continue to rally and set a new high.