Although market indexes were up last week, our model readings slipped outside of large-cap growth and technology. This was due to Nvidia's blockbuster earnings report which led to buying exuberance in technology and semiconductor names. By the end of the week, this optimism finally pushed the S&P 500 past the key 4,200 resistance level. This optimistic breach is being overshadowed by a lack of breadth, however.

Over the weekend, talks progressed on the debt ceiling. President Biden and Speaker McCarthy signed off on an agreement to temporarily suspend the debt ceiling and cap some federal spending. This extension, notably, will last past 2024 meaning Congress would not need to address the issue until after the upcoming Presidential election.

This week we get more data on the strength of the labor market. Economic data has been surprising to the upside, and with inflation still sticky, the chances of a Fed rate hike in June are increasing. There is a 62% chance of a hike compared to just 25% one week ago.

Among sectors, the only area grading out well is Technology. Energy, Health Care, and Industrials are at the bottom of the pile. Picking names with relative strength within most sectors has remained the dominant and most effective strategy.