Good Morning. Today the FOMC two-day meeting begins which means there will be plenty of chatter about what the Fed will do but no answers. Even when the Fed decision is announced on Wednesday, there is likely to be a muted response (unless QE is launched) as the market holds out hope that Draghi and the ECB will exercise their own equity put just a few hours later.
On the data front the calendar starts to kick in. Personal income and spending will be very important to gauge if the recent four month decline in retail sales will likely end soon or not. If the consumer is not seeing any increased real (inflation adjusted) income and spending less (June spending was 0.0%) then retail sales are likely to stay muted, which has negative implications not only for Q2 GDP revisions but also second half inventory plans.
The markets remain truly divided right now. At a fork in the road as discussed over the weekend. The small and mid caps have been trending lower for over six weeks while the big caps have been trending higher.