Week ahead: There’s still some gas in the tank, but the market might need a pit stop

Not running my usual week-ahead deep dive—truth is, there’s just not that much on the docket worth burning the midnight oil over. Outside of the Japanese upper house election, which might jolt the yen or JGBs a touch on the Monday open, it’s slim pickings. And even that’s more of a known unknown than a true wildcard.

So this isn’t your standard preview—think of it more as a trader’s notebook, a loose collection of thoughts as we drift into the fortnight culminating in Aug 1 tariff day.

Human hands start to lift off the wheel for the summer

The market pressed higher again last week, though more like a confident strut than a full sprint. The S&P and Nasdaq both notched fresh all-time highs, but the underlying action was more whisper than roar—thin, selective, and driven by the usual suspects. Mega cap tech took the lead once more, carried along by a backdrop of decent technicals and a news flow that, while uneven, leaned positive when it counted. It wasn’t the kind of rally that hits you over the head—it was the kind that sneaks up while everyone's squinting at earnings and macro tea leaves.

Earnings season is off to a start that feels like polite applause rather than standing ovations. Banks held the line, Netflix and TSM did what they were supposed to, but the price action that followed was hit and miss. It’s a tougher crowd this quarter—expectations are set higher, the valuation cushion is thin, and investors want more than just “good enough.” Still, in the broader picture, corporate America continues to flex. Margins remain near record wides, despite a gauntlet of cost pressures and geopolitical noise. That kind of resilience doesn’t come cheap—it comes from ruthless efficiency and pricing power that’s been carefully cultivated over the past decade.

Flows have been surprisingly mechanical, almost robotic, as human hands start to lift off the wheel for the summer. Systematic strategies are increasingly in the driver’s seat, with models pointing to over $100 billion of passive demand for index futures in the coming weeks. Add in the reactivation of buybacks as Q2 earnings season rolls on, and there’s a structural bid forming beneath the surface. You might not love the setup, but picking a fight with this kind of flow backdrop isn’t exactly a high-odds trade.

Momentum, though, has been anything but serene. Factor rotations have been violent, especially for the momentum crowd, where gross exposure has stayed stubbornly high. It’s been a rough ride for quant-driven long/short players, caught in a whipsaw of moves that defy traditional correlation logic. July often brings some seasonal weirdness, but this felt more like the market shaking the tree just to see who falls out. The deeper truth may be simple: when everyone’s all-in, the smallest tremor can feel like an earthquake.

And now comes the heat. Summer trading is settling in—volumes are thinning, liquidity pockets are appearing, and the usual suspects are already sending postcards from the Hamptons. This is the kind of tape where strange things happen—not because of news, but because someone needed to sell 50,000 futures into an empty book. No strong directional call here, just a heads-up that if you’re leaning too hard on consensus trades, don’t be shocked if a rogue gap opens under your feet.

The next stretch is critical for tech. Over the next two weeks, the titans of TMT step into the earnings confessional, and expectations are unusually muted. The average implied single tech stock move on earnings day is just 4.7%—the lowest in twenty years. That’s either a sign of supreme confidence or extreme complacency. Investors will be watching for two key clues: capex plans and return-of-capital commitments. Even if you’re skeptical about the full force of AI, it’s impossible to ignore the sheer size of capital these firms generate, reinvest, and return. There’s still no better cash engine in the modern economy.

Bubbling in the background is the risk of trade friction, particularly as we edge toward August 1. Some investors seem too casual about the possibility of tariff escalation, brushing it off as old news. Maybe they’re right—maybe tariffs have become background noise. But reflexivity cuts both ways, and all it takes is a surprise headline to snap attention back to the front page.

Meanwhile, infrastructure as an investment theme is gathering weight. Whether it’s AI data centers, energy grid upgrades, reshoring industrial capacity, or military modernization, the world is preparing to build—and that means capital needs to flow into power systems, metals, and industrial logistics. It’s not just a fiscal impulse—it’s a structural shift. Some of the smartest money is already moving in this direction. Equity markets are just beginning to wake up to it.

Crypto continues to hum along in its own orbit. Bitcoin may have coughed up some gains into the weekend, but the broader crypto market quietly surged past the $4 trillion mark. ETH rallied 30% on the week, and flows into spot ETFs remain strong. Regulatory winds are blowing in a more favorable direction, and even corporate treasury desks are starting to get crypto-curious again. For a market that's supposed to be fading, it’s been awfully lively.

Real estate in the U.S. remains frozen in place. With 87% of mortgage holders sitting on rates below market and two-thirds locked in a full 200 basis points below, there’s zero incentive to sell. Existing home sales are projected to stay nearly a quarter below 2019 levels. The Fed may want movement, but homeowners aren’t budging.

Overseas, Japan’s market has stalled despite steady foreign buying. Maybe it’s the JGB yield jitters, maybe it’s election nerves, or maybe the market’s just digesting a long run. Either way, the equity tape feels stuck. In the UK, the FTSE hit fresh highs even as domestic data looked grim. But the FTSE isn’t really a proxy for Britain—it’s a multinational revenue machine in a British wrapper. Don’t let the postcode fool you.

It’s been a scorching run since early April. High beta names are printing monster returns, and the low/high beta spread just logged its best three-month stretch on record. But it’s harder to get the same pop from here. Long-end yields are showing some teeth again, and signs of retail exuberance are flashing across a few corners of the market. Against that, the technicals still lean bullish, the consumer still has punch, corporates are humming, and tech remains the crown jewel.

This is still a bull market. But the air’s thinner up here, the road’s narrower, and summer trading makes for a shakier ride. There’s gas left in the tank, yes—but it might be time to take a little off the pedal.