August 11, 2025

(INVESTORS ARE WARY ABOUT MACRO EVENTS AND THE STOCKMARKET RALLY)

August 11, 2025

Hello everyone

WEEK AHEAD CALENDAR

Monday, August 11

9:30 a.m. Australia Business Confidence

Previous: 5

Forecast: 3

Tuesday, August 12

8:30 a.m. Consumer Price Index (CPI)

Previous: 2.9%

Forecast: 3.0%

8:30 a.m. Hourly Earnings final (July)

8:30 a.m. Average Workweek final (July)

2:00 p.m. Treasury Budget (July)

Earnings: Cardinal Health

Wednesday, August 13

9:30 p.m. Australia Employment Change

Previous: 2k

Forecast: 21.5k

Earnings: Cisco Systems

Thursday, August 14

2:00 a.m. UK GDP Growth

Previous: 1.3%

Forecast: 0.7%

8:30 a.m. Continuing Jobless Claims (08/02)

8:30 a.m. Initial Claims (08/09)

8:30 a.m. Producer Price Index (July)

Earnings: Applied Materials, Tapestry, Deere & Co

Friday, August 15

8:30 a.m. Export Price Index (July)

8:30 a.m. Import Price Index (July)

8:30 a.m. Empire State Index (August)

8:30 a.m. Retail Sales (July)

9:15 a.m. Capacity Utilization (July)

9:15 a.m. Industrial Production (July)

9:15 a.m. Manufacturing Production (July)

10:00 a.m. Business Inventories (June)

10:00 a.m. Michigan Sentiment preliminary (August)

MUSINGS OVER THIS MARKET

Let’s see – what’s on the board this week?

CPI inflation data will grab the spotlight this week – there will be lots of talk of whether it will be potentially cool, warm or too hot.

The number revealed will influence the Fed’s decision in September. And investors, also, will be digesting this data and attempting to predict the Fed’s move. Though the central bank is widely predicted to cut next month, any hint that inflation is charging away from the central bank’s 2% target, will add to stagflation fears, and frustrate that outlook.

Retail sales will also be thrown into the mix, which will ascertain the health of the consumer.

Investors are wary.

Many may be grabbing the anxiety medication out of the top drawer.

Why?

A Mix of the following elements:

# high valuations in the market,

# rising concentration risk – hint – that’s tech –

and the realisation that we are tracking into a period of seasonal weakness, where August & September are traditionally poor months for equities.

Investors are on the lookout for a 5% pullback or thereabouts, owing to what I have outlined above. Also, let’s be mindful that just one headline can jolt the market. Of course, there is always the possibility that the market keeps grinding up toward 6600/7000 in Q2 and completely ignores all the noise that is surrounding it.

Another bugbear for the investor is the trustworthiness of government data going forward, after President Trump fired the BLS commissioner last week following the issuance of a weak jobs report.

And Trump is trying to spin the Fed to his liking.

The President has called on Stephen Miran (Council of Economic Advisors chair) to take a key seat on the Fed, replacing Adriana Kugler, who resigned last week.

With a potential dovish stance, Miran could act in opposition to Fed Chair, Powell. Trump has repeatedly criticized Powell for not lowering interest rates – this raises questions about Fed independence. What the markets don’t need is the Fed entangled in political manoeuvres.

Something to watch for the Aussies will be the Reserve Bank of Australia (RBA), which discloses its rate decision on Tuesday. It’s a 100 per cent certainty that the governor will cut, but you know what happened last time. Even a 97 per cent certainty didn’t cut it before. It’s not in the bank until it is.

On the geopolitical front, Trump and Putin are due to meet next week to thrash out some sort of peace agreement between Russia and Ukraine. It’s not yet known whether Zelensky will have a seat at that meeting. Russia wants land, Ukraine doesn’t want to give Russia any land. Trump, the artful negotiator, will need to bring all his skills to the table to score an agreement here.

MARKET UPDATE

S&P500

The index is confounding everyone with its relentless grind higher. It is certainly climbing a wall of worry. After testing around 6213, the S&P has rallied, and as weird as it may seem, there are still no signs of even a shorter-term top “pattern wise”. So, once again, the bias is to the upside. Of course, risk is very high given the overbought market after its 30% surge since April. If inflation data comes in cool, this may fuel the index rally further. And, of course, if the read is hotter than expected, we could get a dose of volatility in the market.

Resistance: 6400/25 area

Support: 6250/6140/50 & 6100 area.

GOLD

The yellow metal is still stuck in tight ranges, which can be seen as an extended period of consolidation or topping. Gold futures have slipped this Monday evening (my time). The gold pattern is still unfolding.

Resistance: $3428/33/ $3449/54 and $3479/84 (break/close above would abort the larger topping view).

Support: $3443 & $3285 & $3243

BITCOIN

Bitcoin tested support in the $112 area in early August. It has rallied since then, past the $118/$119 resistance, and reached around $122+ this evening. More gains are favoured.

Resistance: ~$123k

Support: $113/$118k and $111/$112 area.

Ethereum (ETH) has also rallied nicely and is now sitting above the $4k level.

HISTORY CORNER

On August 11