Market Direction Weekly Closing Numbers

The economy

The stock market endured its second consecutive range-bound week, but this time around, the S&P 500 could not avoid a lower close. The benchmark index shed 0.2% for the week while the Nasdaq Composite (-1.0%) underperformed amid weakness in biotechnology.

Equity indices climbed through the first half of the week, but stumbled into the weekend as investors focused on global growth concerns. On Wednesday, the World Bank lowered its 2016 global growth forecast to 2.4% from 2.9%, but stocks climbed despite the warning.

The renewed grumblings about the state of the global economy got louder on Thursday after the Bank of Korea unexpectedly cut its key interest rate to a record low of 1.25% from 1.50%. Separately, China reported a 0.5% month-over-month decline in May CPI (expected -0.2%). Commodity markets flashed some red flags as copper futures abruptly reversed from a one-month high to a four-month low, ending the week at $2.028/lb. For its part, crude oil marked an 11-month high $51.67/bbl on Thursday, but reversed from that level and continued its retreat through Friday to end the week at $49.06/bbl. Gold (+2.9% to $1275.70/ozt) and silver (+5.7% to $17.31/ozt) advanced even though the Dollar Index ticked up 0.6%.

Another sign of defensive posturing could be found in global bond markets as European yields plummeted after the European Central Bank launched its bond purchase program. Germany's 10-yr Bund yield ended the week at 0.02% after marking a record low at 0.01%.

The global risk-off cocktail pushed out rate hike expectations with the probability of a June hike dropping to just 1.9% from 6.0% at the end of last week, according to the fed funds futures market. The likelihood of a hike in July dropped to 23.0% from 35.0%, leaving December (59.1%) as the month that shows the first 50.0%+ probability of a rate hike.

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By the numbers the weekly closing index numbers compared to the initial sign-up and subscribe recommendation closing numbers: 

Stock Market Closing Numbers
compared to Recommendation Numbers
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Nasdaq	?	?	?
S&P 500	?	?	?

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