Market Direction Week of July 4, 2016

Market Direction: BULLISH alert issued 6/2/2016

Last Week Review: Stocks recorded their strongest weekly gains of the year following last week's Brexit-induced weakness. This highlights the importance of staying invested through volatile periods because the best days for the market tend to follow its weakest days. While the market's strong performance was well received by investors around the world, we expect volatility to continue to persist as Brexit now joins the line of prominent market risks that includes China, Fed tightening and sluggish global growth. Each is likely to take its turn in the spotlight as the year progresses. We don’t think this is the beginning of a bear market, but we suggest preparing for ongoing volatility in the second half of the year by rebalancing your portfolio to the mix of stocks and bonds that allows you to stay invested through pullbacks like we experienced last week.

How the market finished last week, the S&P 500 up 3.2%, the Nasdaq up 3.3%, and the Dow up 3.2%.

This Week: The RBA meeting this week should command a lot more attention than usual, since it will be the first G20 central bank to meet since the UK voted to leave. It will set the tone for others later in the month, with of course the Fed, ECB and BoE the most important. A priority now for central bankers is to cushion economies from the adverse effects of the Brexit decision, and we have already seen some of that from the UK.

The Fed minutes this week will have to be taken with a pinch of salt given that the discussion took place before the Brexit vote, but the events of the past week will likely have strengthened the hand of those in the Fed and around the world calling for a policy response.

Economic data this week focuses on PMI and jobs data. Clearly Friday’s US job numbers will be crucial, and it will be interesting to see if the last, abysmal figure gets revised upwards and if jobs growth rebounded in June.

Economic Calendar: Factory Orders (7/5), International Trade (7/6), FOMC (7/6), Employment Report (7/8)

Some of the major earnings announcements on deck: AA, PEP, CSX, YUM, GBX.

 

$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.

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