Market Direction Week of January 1, 2017©

Market Direction: BULLISH alert issued 11/10/2016

Last Week Review: Stocks fell on the week, ending the Dow Jones Industrial Average's seven-week rally. While stocks faded into the new year, 2016 was positive for stock and bond investors as the S&P 500 was up 12% including dividends, and the Barclays U.S. Aggregate Bond Index recorded a total return just shy of 2.5%. With greater uncertainty ahead of us, we expect a return to normal volatility in 2017, with at least one 10% stock market correction as well as several smaller pullbacks. But that doesn't mean markets are bound to be lower a year from now. Over the last 20 years, stocks have fallen by 14% within the year, but have posted gains of about 10% on average, by year-end.

How the market finished last week, the S&P 500 down 1.1%, the Nasdaq down 1.5%, and the Dow down 0.9%.

This Week: Life slowly returns to normal after the lull between Christmas and New Year. With many markets closed on Monday it is a disjointed start to the year, but things will slowly get back to the usual rhythm. PMI figures dominate the week, coming from the eurozone, UK, China, US and Canada, and the economic schedule culminates in the first non-farm payrolls reading of 2017.

Corporate news has yet to return in full from its Christmas break, but we do get trading updates from Next and Persimmon. The former should provide a useful indication of how retailers fared over Christmas, while the latter will be interesting given the recent surprise warning from fellow homebuilder Bovis. 

Economic Calendar: ISM Mfg Index (1/3), ADP Employment Report (1/4), Factory Orders (1/6), Employment Report (1/6)

Some of the major earnings announcements on deck: SONC, STZ, HELE, MON, 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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