July started very bullish for US equity markets as well as other global economies. So far Blue Chips (DJIA) are up over 6% and continue to rise daily. One of the “cause and effects” can be described by just one word: *Earnings*. Alcoa Inc. (mass aluminum producer) and CSX (one of largest railroad co) opened the earning season with better than expected gains. The bullish news sparked a rally in the markets and sent the “S&P 500 index” right up to its 50-day moving average, signaling possible trend reversal. 

Yesterday the U.S equity markets rallied almost 2% and risk aversion ($VIX) fell 2.21%. As a result, the low-yielding Japanese yen and U.S. dollar made the worst performances. High debt levels continue to plague the greenback. On the other hand, positive fundamentals pushed the euro and British pound higher. The Australian dollar underperformed the kiwi because of weak business confidence. Also, the Canadian dollar did not match expectations - despite strong crude oil - because of its link to the U.S. economy through the two nations’ strong trade relationship. The Swiss franc recently lost some of its appeal as a safe-haven currency because risk appetite increases demand for the franc’s major peers.

US Retail Sales came out worse than expected. Consumers as a whole continue to be skeptical of the economy’s health, (can’t blame them) purchasing less goods and utilities for the second straight month in a row. One thing to note is during summer months history shows that these figures tend to drop anyways.  Retail Sales