Market Direction Weekly Closing Numbers©

Market Direction: BULLISH alert issued 11/10/2016

The economy

After enjoying a solid 1.0% gain two weeks ago, the stock market returned to its range-bound ways. The S&P 500 spent the week inside a 31-point range, ending the week higher by 0.1%.

The past week was rife with earnings, economic data, and commentary from two major central banks, but the market shrugged off the busy event calendar, remaining near record levels.

Most notably, the Federal Open Market Committee concluded its latest two-day meeting on Wednesday. The central bank maintained its policy stance and gave little indication that a rate hike could be announced at the next policy meeting in May.

Wednesday's FOMC announcement followed the release of a stronger than expected ADP Employment Report for January (246,000; Briefing.com consensus 165,000). Friday's release of the Employment Situation report also showed above-consensus headline growth (227,000; Briefing.com consensus 170,000), but average hourly earnings increased just 0.1% (Briefing.com consensus 0.3%) and last month's growth was revised down to 0.2% from 0.4%. As a result, the year-over-year average hourly earnings growth rate slowed to 2.5% from 2.8% in December.

The combination of solid job growth and lackluster wage growth was welcomed by the stock market, considering it did not foreshadow an inflationary spike that would prompt a hawkish response from the Fed.

Rate hike expectations saw a moderate downtick. On Friday afternoon, the fed funds futures market pointed to a 63.5% implied likelihood of a June hike, down from last week's 69.2%.

On the earnings front, investors received a set of results from heavyweights like Amazon (AMZN), Apple (AAPL), Facebook (FB), Visa (V), UPS (UPS), and others. Amazon and UPS missed estimates while Apple, Facebook, and Visa surpassed expectations. However, it is worth noting that while Apple reported above-consensus results, the company faced reduced competition during the quarter after the recall of Samsung's Note 7 in early October.

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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	2/3/2017	Difference
Dow Jones	18,807.88	20,017.46	1,209.58
Nasdaq	5,208.80	5,666.77	457.97
S&P 500	2,167.48	2,297.42	129.94

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