Market Direction Week of September 19, 2016

Market Direction: BULLISH alert issued 6/2/2016

Last Week Review: Stocks were higher on the week, with most of their gains recorded after the Federal Reserve announced it would keep short-term interest rates steady. While no change in rates was expected, the Fed did adjust its commentary on the future path of short-term interest rates, noting that, "the case for an increase in the federal funds rate has strengthened…" In addition to clearer expectations for the path of short-term interest rates in the near future, the Fed reduced its longer-term estimates for future rate hikes towards market expectations. Market reaction to the Fed's statement was positive, reflecting an outcome that better aligns with market expectations, reducing interest rate uncertainty. However, we expect volatility to continue in response to speculation over potential future rate hikes and other prominent global uncertainties, including the impacts of Brexit, China's slowdown, and the U.S. presidential election.

How the market finished last week, the S&P 500 up 1.2%, the Nasdaq up 1.2%, and the Dow up 0.8%.

This Week: The pre-Fed volatility spike and post-Fed volatility decline have run their course, but the first presidential debate on Monday (9/26) will likely be a catalyst for more volatility next week. 

The past week has seen central banks once again pave the way for a rally in equity markets, buoyed by hopes of further loose monetary policy. The coming week sees economic data ramp up after a relatively quiet period. German confidence and employment data, plus eurozone CPI figures, will dominate the stage for European markets, while in the UK some revisions to GDP will be key. US data includes further GDP revisions, plus the Chicago PMI number. 

Economic Calendar: Consumer Confidence (9/27), Durable Goods Orders (9/28), GDP (9/29), Chicago PMI (9/30)

Some of the major earnings announcements on deck: CALM, FDS, NKE, COST, MKC.

$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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