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Last
Week Review: Stocks were marginally lower on the week
and failed to hold on to strong gains recorded Tuesday. Driving stocks lower on
Wednesday was a batch of poor earnings reports by stocks in the consumer
sector. However, some of the concerns around softening consumer spending were
offset on Friday as the Commerce Department reported that retail sales jumped
1.3% in April, its strongest growth in the last year. The acceleration in
retail sales could point to stronger GDP growth in the second quarter compared
to the sluggish 0.5% growth witnessed in the first quarter. We think that the
U.S. will post 2.0% - 2.5% GDP growth in 2016, which could provide the footing
needed for stocks to climb higher from here.
How
the market finished last week, the S&P 500 down 0.5%, the Nasdaq down 0.4%,
and the Dow down 1.2%.
This
Week: Traders still appear to be respecting the
2,040-2,100 range in the SPX but weakness in DJT and COMPX is concerning.
Next week investors will be getting a lot more economic data
and some commentary out of Fed officials to digest. Tuesday looks like it has
some potential market-moving catalysts with two Fed officials speaking, but
there are also several other reports I think could be important. I believe that
Tuesday’s Housing Starts and Building permits and Thursday’s Initial Jobless
Claims are worth monitoring given the recent mixed housing data and unexpected
jump in yesterday’s jobless claims. In addition, the preliminary Q1 GDP report
out of Japan will be something to keep an eye on given the lack of policy
action out of recent BOJ meetings.
Economic Calendar: Empire State Mfg Survey (5/16), Consumer
Price Index (5/17), Industrial Production (5/17), FOMC Minutes (5/18)
Some of the major earnings announcements on deck: FL,
DE, HD, CSCO, AAP.
Related Link: http://www.stockmarket-direction.com/
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