Market Direction Week of September 5, 2016

Market Direction: BULLISH alert issued 6/2/2016

Last Week Review: Stocks were modestly higher on the week, but the S&P 500 has traded in a noticeably tight window over the last month and half. Markets advanced in response to August's jobs report, but it wasn't a large enough catalyst to push the market out of this summer's doldrums. While markets have been steady recently, we think investors should not get complacent or expect the same level of stability going forward. History shows that sharp market moves occur frequently, and market corrections, defined as a 10% drop in stocks, have occurred more than once a year, on average. If you're a long-term investor, you will likely experience many corrections, so prepare for unexpected episodes of volatility by ensuring you own the right mix of stocks and bonds that will allow you to stay invested and have the confidence to buy quality investments at lower prices when you have the opportunity.

How the market finished last week, the S&P 500 up 0.5%, the Nasdaq up 0.6%, and the Dow up 0.5%.

This Week: Recent data and events have kept equites essentially range-bound for 6 weeks now. A breakout catalyst is likely on the horizon; though probably not next week.

Non-farm payrolls and a weak US manufacturing PMI have essentially scuppered the chances of a Fed rate hike in September. It will be an odd start to the week, with US markets taking the day off for Labor Day. We may therefore see the post-NFP market reaction extend into Tuesday.

Key events for the week include the UK services PMI reading and then the European Central Bank meeting on Thursday. After a remarkable UK manufacturing PMI, all eyes will be on the vital services number to confirm or deny their worst fears on the UK economy. Sterling staged a strong recovery after some days of weakness, and now with a weaker NFP number, it looks set to head back to the top end of its recent range. Meanwhile, eurozone markets will be all ears to see what Mario Draghi has to say regarding the outlook and whether more easing is warranted. With CPI drifting lower, even in its core form, he could find the pressure building as the year heads towards its close.

Economic Calendar: PMI Services Index (9/6), ISM Non-Mfg Index (9/6), JOLTS (9/7), Beige Book (9/7), Consumer Credit (9/8)

Some of the major earnings announcements on deck: PLAY, RH, MFRM, KR, MRVL.

 

$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/