Market Direction: BULLISH alert
issued 11/10/2016
The tech-heavy Nasdaq closed higher for a fourth straight session Wednesday, while the Dow industrials finished lower, as stock investors digested hawkish comments from Federal Reserve speakers and a drop in U.S. gasoline inventories bolstered the energy sector.
The Nasdaq Composite Index COMP, +0.38% climbed 22.41 points, or 0.4%, to finish at 5,897.55. The Dow Jones Industrial Average DJIA, -0.20% fell 42.18 points, or 0.2%, to close at 20,659.32, for its ninth losing session in the past 10. Meanwhile, the S&P 500 index SPX, +0.11% finished up 2.56 points, or 0.1%, at 2,361.13.
Gains in energy did most of the heavy lifting, as only five of the S&P 500’s 11 primary sectors finished in the green. Financials, which have been big gainers in recent months, led decliners, closing down 0.5%.
“It’s going to be touch-and-go until earnings season and then the entire conversation is going to change,” said Karyn Cavanaugh, senior market strategist at Voya Financial, in an interview. Cavanaugh said investors are focusing too much on the drama of President Donald Trump and Congress to appreciate the economic underpinnings of the market.
“We’re probably going to get double-digit earnings growth this quarter, showing that things are getting better even without Administration changes,” she said.
First-quarter earnings, with the bulk of reports beginning in mid-April, are expected to grow by 9.1%, in what would be the largest year-over-year quarterly gain since the fourth quarter of 2011, according to John Butters, senior earnings analyst at FactSet. Voya’s Cavanaugh feels that will easily become a double-digit gain since estimates are traditionally conservative.
“Today is just a pause,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab. “Valuations are a bit stretched, but that’s nothing unusual. Meanwhile, economic data remains strong and markets are optimistic that we’ll see progress on tax reform out of Washington.”
Traders are also tracking the U.K.’s invocation of Article 50, which officially starts its withdrawal from the European Union.
“This has never happened before, so no one knows how it will play out,” Frederick said. “It’s an important event, but I’m not sure it’s a negative event, at least as far as the market goes.”
The tech-heavy Nasdaq closed higher for a fourth straight session Wednesday, while the Dow industrials finished lower, as stock investors digested hawkish comments from Federal Reserve speakers and a drop in U.S. gasoline inventories bolstered the energy sector.
The Nasdaq Composite Index COMP, +0.38% climbed 22.41 points, or 0.4%, to finish at 5,897.55. The Dow Jones Industrial Average DJIA, -0.20% fell 42.18 points, or 0.2%, to close at 20,659.32, for its ninth losing session in the past 10. Meanwhile, the S&P 500 index SPX, +0.11% finished up 2.56 points, or 0.1%, at 2,361.13.
Gains in energy did most of the heavy lifting, as only five of the S&P 500’s 11 primary sectors finished in the green. Financials, which have been big gainers in recent months, led decliners, closing down 0.5%.
“It’s going to be touch-and-go until earnings season and then the entire conversation is going to change,” said Karyn Cavanaugh, senior market strategist at Voya Financial, in an interview. Cavanaugh said investors are focusing too much on the drama of President Donald Trump and Congress to appreciate the economic underpinnings of the market.
“We’re probably going to get double-digit earnings growth this quarter, showing that things are getting better even without Administration changes,” she said.
First-quarter earnings, with the bulk of reports beginning in mid-April, are expected to grow by 9.1%, in what would be the largest year-over-year quarterly gain since the fourth quarter of 2011, according to John Butters, senior earnings analyst at FactSet. Voya’s Cavanaugh feels that will easily become a double-digit gain since estimates are traditionally conservative.
“Today is just a pause,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab. “Valuations are a bit stretched, but that’s nothing unusual. Meanwhile, economic data remains strong and markets are optimistic that we’ll see progress on tax reform out of Washington.”
Traders are also tracking the U.K.’s invocation of Article 50, which officially starts its withdrawal from the European Union.
“This has never happened before, so no one knows how it will play out,” Frederick said. “It’s an important event, but I’m not sure it’s a negative event, at least as far as the market goes.”
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The all-time highs since our initial
recommendation to go LONG
this market. Here is how the markets have performed:
Stock Market
Direction Recommendation (11/10/2016)
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Dow
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up 2,361.23 points a 12.55% gain
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3/1/17
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Nasdaq
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up 719.26 points a 13.81% gain
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3/21/17
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S&P 500
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up 233.50 points a 10.77% gain
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3/1/17
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Related Link: http://www.stockmarket-direction.com/
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