Market Direction Weekly Closing Numbers©

Market Direction: BULLISH alert issued 11/10/2016

The economy

The stock market enjoyed an upbeat start to 2017, as the S&P 500 gained 1.7% during the abbreviated first week of the year. The Nasdaq Composite (+2.6%) outperformed while the Dow Jones Industrial Average (+1.0%) lagged.

The first two sessions of the week featured a steady advance, which placed the S&P 500 just below its record high from December. The two days of gains were followed by an intraday pullback on Thursday, but the brief slip became a distant memory by day's end. However, it is worth noting that the weak spell was brought on by cautious guidance from Kohl's (KSS) and Macy's (M). The two names registered respective losses of 19.0% and 13.9%, while most other apparel names also struggled. Conversely, a daylong rally in Amazon (AMZN) returned the discretionary sector to little changed by Thursday's close.

On Friday, investors received the December Employment Situation Report. The report fit pretty well into the market's view of things, as the headline disappointment (156,000; Briefing.com consensus 175,000) was offset by a sizable revision to the November reading (to 204,000 from 178,000). Average hourly earnings rose 0.4% (Briefing.com consensus 0.3%) after declining 0.1% in November. November average workweek was revised down to 34.3 from 34.4 and the December reading remained at 34.3 (Briefing.com consensus 34.4).

Equity indices advanced to new record highs after the December jobs report while Treasuries retreated, erasing a large portion of their gains from earlier in the week. Despite the pullback, the benchmark 10-yr note eked out its third consecutive weekly gain, pressuring its yield to 2.42% from last week's 2.45%.

The December jobs report gave a boost to the greenback, but the U.S. Dollar Index could not avoid a lower close for the week, shedding 0.1%, despite setting a fresh 14-year high on Tuesday.
There was no significant shift in rate hike expectations during the past week. The fed funds futures market ended the week showing a 69.0% implied likelihood of a rate hike in June.

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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	1/6/2017	Difference
Dow Jones	18,807.88	19,963.80	1,155.92
Nasdaq	5,208.80	5,521.06	312.26
S&P 500	2,167.48	2,276.98	109.50

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