Market Direction Weekly Closing Numbers

Market Direction: BULLISH alert issued 6/2/2016

The economy

The stock market ended a volatile week on a lower note as participants responded to a downturn in European banking names and a hotter-than-expected reading of the Consumer Price Index (CPI) for August. 

The rate hike conversation remained top of mind throughout the week, but fears of a September hike were stomped out by the weekend. A disappointing August Retail Sales report (-0.3%; Briefing.com consensus -0.1%) contributed to the change in expectations, but somewhat surprisingly, Treasuries still sold off. Weakness in the 10-yr note drove its yield to a brief test of 1.75% before ending the week at 1.69% (+1 bp). The retreat in Treasuries suggest the bond market may be sniffing out some inflation down the road.

Taking a glance at the fed funds futures market, the implied likelihood of a September hike declined to 15.0% from last week's 24.0% while the implied odds of a hike in December slipped to 55.5% from 58.4% last week.

The technology sector (+3.0%) was a clear outperformed during the week, largely thanks to an 11.4% surge in the shares of Apple (AAPL). The top-weighted stock rallied on reports of strong iPhone 7 sales, ending the week near levels not seen since the end of 2015.

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By the numbers the weekly closing index numbers compared to the initial BULLISH recommendation closing numbers: 

Stock Market Closing Numbers
compared to Recommendation Numbers
	6/2/2016	9/16/2016	Difference
Dow Jones	17,838.56	18,123.80	285.24
Nasdaq	4,971.36	5,244.57	273.21
S&P 500	2,105.26	2,139.16	33.90

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