Market Direction Week of July 25, 2016

Market Direction: BULLISH alert issued 6/2/2016

Last Week Review: Stocks were up for the fourth week in a row, closing just below all-time highs on Friday. Helping lift stocks higher was a solid start to the earnings season. We expect stocks to grind higher from here, especially if company earnings continue to beat expectations. However, if the Federal Reserve indicates in its statement next week that it will raise interest rates more quickly than expected, stocks could show some weakness in the short-term. Be prepared for both of these outcomes by owning the right mix of stocks and bonds that will allow you to reach your financial goals, given your comfort with risk.

How the market finished last week, the S&P 500 up 0.6%, the Nasdaq up 1.4%, and the Dow up 0.3%.

This Week: Earnings season in still in full swing in the US; 125 companies in the S&P 500 have reported thus far, with 75 beating estimates. So far earnings have fallen by 1% compared to the previous quarter, while sales have risen 2.7% (for the index as a whole). The constant flow of earnings has acted to prop up US indices after they touched new record highs last week.

While most indicators are showing little concern of an impending downturn, it may take a fair amount of optimistic forward guidance for Q3 to keep this momentum going. Pay close attention to what the corporate leaders are saying about Q3, as they announce their Q2 results. Expect some volatility by midweek as the FOMC meets. While no rate change is expected, hawkish comments seem likely.

Economic Calendar: FOMC Meeting (7/26), Durable Goods Orders (7/27), International Trade in Goods (7/28), GDP (7/29)

Some of the major earnings announcements on deck: GILD, AAPL, CAT, MCD, GOOGL.

 

$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, write us. Share with a friend. Cha-ching.

Related Link: http://www.stockmarket-direction.com/