The markets have been trending risk-off for a few weeks now and last week was a continuation of that tendency. The utilities sector outperformed the broader market for a 7th consecutive week. Given what we're seeing in both utilities and Treasuries, I think there’s good reason to be cautious here.
It looks like the market’s short-term direction will be almost entirely stimulus-driven. With most of the existing stimulus having run out, the economy is showing signs that the current recovery is stagnating. Overall, the market’s signals are still looking mixed, despite last week’s rally in equities.
Weakness on the jobs front, which started the week with massive layoffs in the airline sector and ended with a weaker than expected payroll report, was quickly overshadowed by investors’ favorite word - stimulus! President Trump testing positive for COVID-19, however, may complicate matters.