Equity markets advanced another day on Tuesday, taking the S&P 500 up by 0.3% to set a 2-month closing high. The rally is the 2nd longest for the year and may continue higher, given solid results from retailers next week. The risk is that retailers' profits and guidance will fall short of the consensus and cap gains for the index, and there are reasons to fear. Reports are due from Walmart, Target, and Home Depot; 2 of which have struggled this year.

This week's risk is Fed-related. There are a dozen speaking engagements on the calendar, including an IMF panel discussion with Jerome Powell. The discussion will surely hit on inflation and monetary policy so that it will be closely watched for clues. The latest indications are that the peak of the FOMC rate hiking cycle is near; words contrary to that outlook will harm the market. If the S&P 500 is unable to get above 4,350 by the end of the Q3 reporting period, the odds are high that another deep stock market correction will follow.