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 BPI/Sector Scopes Monthly Update & iShares PHLX Semiconductor Index Fund (SOXX)

Between the end of the quarter, the start of summer and holidays in the US and Canada, the last week has been one of the quietest for equity markets in a long time. The coming ten days, however, have the potential to be quite different, as we move into July earnings season which historically has seen equities bounce back from spring corrections. The remainder of this week remains quiet for news which can be a good thing as confession season for companies has been extremely quiet suggesting most management teams are confident in their ability to meet or even beat their forecasts for the quarter. Next week, earnings season kicks off with results on the way from several of the largest US financial companies (banks and brokerages). All of the 23 major banks tested recently passed their annual stress test and have been allowed to resume paying dividends and buying back stock. Investors may also be looking to see if loan loss provisions are continuing to come down which would be a sign of a strengthening economy.

In economic news, for the US, inflation reports take center stage along with industrial production. China has a number of big numbers scheduled for next week including trade, Q2 GDP and retail sales. Three central banks are holding meetings as well, the Bank of Canada, the Bank of Japan and the Reserve Bank of New Zealand.

Commodities have been particularly active over the last week and may remain volatile into July. Natural gas has been on a tear with heat waves boosting summer cooling demand. Crude Oil has been bouncing around with investors unable to figure out the implications of OPEC + failing to agree on how to move forward once the current program for restoring supply ends later this month.

In this issue of Equity Leaders Weekly, we take our monthly look at the Sector Scopes feature, and at what recent gains for the semiconductor sector are telling us about investor sentiment.

BPI/Sector Scopes Monthly Update 

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