Market Direction Week of March 21, 2016

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Last Week Review: Stocks were higher for the fifth week in a row, and the S&P 500 is now positive year-to-date. This week's gains were back-weighted as markets rallied after the Federal Reserve (Fed) reduced the amount of expected interest rate hikes to two from four by the end of 2016. Prior to the Fed's rate decision, the Dow Jones Industrial Average (Dow) traded in a tight range because investors were cautious to shift their portfolios' positions before such a major market event. In addition to the Fed's monetary policy decisions, the price of oil and concerns about sluggish global growth are likely to drive choppy returns in the short term. Be prepared for this by ensuring your portfolio is positioned in a way that allows you to stay focused on your long-term financial goals, not tomorrow's headlines.

Major indexes were higher on the week, with the industrial sector leading the market. The Dow Jones Industrial Average gained 389 points to end the week at 17,602, up 2.3%. The S&P 500 gained 27 points to end at 2,050, up 1.4%. Bond prices were higher on the week, pushing the U.S. 10-year Treasury bond yield down 0.11% to end at 1.87%.

How the market finished last week, the S&P 500 up 1.4%, the Nasdaq up 1.0%, and the Dow up 2.3%.

This Week: A lot has happened in the past month. Despite the growing negative sentiment and calls for a bear market, a recession or both, the stabilization and rebound in crude oil prices and continued accommodative central bank policies have resulted in an equity market rebound that virtually no one predicted. The big question from here is whether or not it can continue. For the current bull market to officially be 7 years old, the SPX need to close at a new record high above the 5/21/15 high of 2130.82. While another 80+ point rally may sound impossible at this point, the SPX has already gained over 200 points in the past month. A quiet first half of the week gives way to a solid rally sparked by global central bank meetings and a rebound in oil prices.

Economic Calendar: PMI Manufacturing Index Flash (3/22), Durable Goods Orders (3/24), GDP (3/25)

Some of the major earnings announcements on deck: MFRM, FIVE, NKE, KBH, FINL.

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