Market Direction Weekly Closing Numbers©

Market Direction: BULLISH alert issued 11/10/2016

The economy

Equity indices enjoyed an upbeat start to the week, rising alongside European stocks, even though the results of the constitutional reform referendum in Italy will lead to political uncertainty going forward. Italian citizens voted 59-41 to reject a proposal that would have reformed the country's Senate. Prime Minister Matteo Renzi offered his resignation, but Italian President Sergio Mattarella did not accept that resignation until after Wednesday's passage of a budget for 2017.

The next couple days were quiet in terms of news, but stocks continued pushing higher, keeping post-election trends intact. Biotechnology names took a tumble on Wednesday after President-elect Donald Trump said he wants to lower drug prices. However, the industry group rebounded over the next couple days, ending the week on a modestly higher note.

On Thursday, stocks climbed after the release of the latest policy statement from the European Central Bank. The ECB made no changes to its interest rate corridor, but announced that its asset purchase program will be extended until December. The news of an extension overshadowed the revelation that the pace of purchases will slow to EUR60 billion from EUR80 billion, starting in March. ECB President Mario Draghi said that the central bank will buy assets that have a lower yield than the current deposit rate, which was met with a slide in the euro.

Next week will be highlighted by the December FOMC meeting, which is expected to conclude with the first rate hike since last December. The market is all but certain that a rate hike will happen next week, evidenced by the fed funds futures market, which showed a 97.2% implied probability of a rate hike on Friday afternoon.

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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
	11/10/2016	12/9/2016	Difference
Dow Jones	18,807.88	19,756.85	948.97
Nasdaq	5,208.80	5,444.50	235.70
S&P 500	2,167.48	2,259.53	92.05

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