What Catalysts Are Driving the Market as We Await Key Earnings and Data? (VIDEO)

In today's Action Alerts PLUS Daily Rundown, Chris Versace explores the catalysts shaping Monday's market and previews the slew of corporate earnings and economic data expected this week.

He also explains the drivers behind the club's cautious approach.

CHRIS VERSACE: Good morning, Action Alerts Plus members. It's Monday, July 25. And as we kick off this week of trading, we're starting off on a relatively slow pace, not a lot of earnings reports, not a lot of economic data. However, that is going to shift considerably as we move through the week. All told, we've got something like 900 companies reporting their earnings over the next several days, including a number of AAP holdings ranging from Apple, Amazon, and Google.

We've also got the Fed meeting. And while expectations are for 75 basis points, the real question to us is going to be, what does the Fed say and signal with its language about the back half of the year, in particular the September meeting, which will be its next one. Remember, we've got a lot of data to be had between the end of this July meeting and the September meeting.

And we'll be looking to see, is the economy continuing to slow? Is it slowing faster than expected? And is inflation continuing to run hot or hotter than expected? All that's going to dictate what the Fed will do later this year.

We've, also, this week, got the first hard look at the June quarter GDP rating. And the Atlanta Fed GDPNow forecast currently has it at negative 1.6%. The concern here is that if it does come in negative, technically speaking, that means we will have had a recession given the negative GDP print for March. All of this, of course, is going to keep the market on very, very uncertain footing as it tries to juggle what the impact of what the Fed is likely to do with the speed of the economy and what it means for earnings expectations in the back half of the year.

And you kind of have a sense of what the number is likely to be. And I say that because earlier today the White House is getting out in front of the upcoming GDP print, saying that it's just wrong if it's two back-to-back quarters of negative GDP when the economy is simply so strong. So the bottom line here is we have a big week of earnings and economic data. And we're going to be watching it all very closely.

Candidly, again, it's going to be a barn burner of a week, a lot of moving pieces. But at the end of the week, we're likely to see expectations get readjusted both for the speed of the economy, earnings expectations for the back half of the year, as well as a number of different sectors. Through it all, we're going to continue to take a steady pace with what we're doing. We've got plenty of cash in the portfolio to

be opportunistic.

We've also got our inverse ETFs in play to hedge should the market get a little wobbly during the week. And it very well could. I say that because the fear-greed index continues to be in fear mode. In other words, the market's likely to trade potentially wildly based on what it hears last. Good news will be good news in the market. Bad news? Well, we know what that means.

On a technical perspective, I'd note that we see plenty of resistance levels ahead. Again, that's likely to mean the market is going to be choppy. And members, that's today's Daily Rundown. Thanks for joining us. We'll be back tomorrow.