Market Direction: BULLISH alert
issued 11/10/2016
Last Week Review: U.S. large-cap stocks
posted gains of nearly 1.5% on the week, setting new record highs while
shrugging off Washington concerns (which prompted the one-day selloff last
week). Investors focused on corporate earnings results, the latest commentary
from the Federal Reserve, and an announcement that OPEC is extending production
cuts in an effort to support oil prices. Additionally, U.S. GDP growth for the
first quarter was revised from 0.7% to 1.2% on the back of stronger consumer
spending. With more than 90% of companies in the S&P reporting earnings for
the first quarter, economic data will likely be at the forefront of investors'
minds.
The S&P 500 is now up 8% on the year, reflecting supportive fundamentals and optimistic expectations for the Trump administration's pro-growth reforms. International markets are doing even better, with developed-market equities (EAFE) gaining more than 12% and emerging-market stocks adding nearly 18% year-to-date. Consumers and central banks have played a large part in the markets' strength. Rising consumer confidence, a healthy labor market, and lower prices at the pump all offer support to the outlook for household spending, while still-low rates and monetary-policy stimulus have set the backdrop for stock market gains. Each of these was on display last week.
The S&P 500 is now up 8% on the year, reflecting supportive fundamentals and optimistic expectations for the Trump administration's pro-growth reforms. International markets are doing even better, with developed-market equities (EAFE) gaining more than 12% and emerging-market stocks adding nearly 18% year-to-date. Consumers and central banks have played a large part in the markets' strength. Rising consumer confidence, a healthy labor market, and lower prices at the pump all offer support to the outlook for household spending, while still-low rates and monetary-policy stimulus have set the backdrop for stock market gains. Each of these was on display last week.
How
the market finished last week, the S&P 500 up 1.4%, the Nasdaq up 2.1%, and
the Dow up 1.3%.
This Week: Next week starts with holidays in
both the UK and US, which means that the real activity only begins on Tuesday.
US jobs data dominates the week, with the private ADP report on Thursday (a day
later due to Memorial Day), and then non-farm payrolls on Friday, with
expectations for 175,000 job gains and wage growth of 2.7% year-over-year for
the month, according to Bloomberg. As the next Federal Reserve meeting is the
following week, this and the US PMI numbers will be closely watched. UK PMIs
begin to appear, although the services PMI will be released the following week.
An
almost empty calendar for corporate news signals that we are in the fallow
period for company news in the UK and US. As a result, the focus will shift
back to macro issues, such as the potential for a fresh rate increase in the
Fed, plus the ramifications from the OPEC meeting last week.
Economic
Calendar: Personal Income and Outlays (5/30), Consumer Confidence (5/30), Beige
Book (5/31), ISM Mfg Index (5/31), PMI Mfg Index (6/1) Employment Report (6/2)
Some of the major earnings announcements on deck: ADI,
KORS, AVGO, DG, FIVE.
$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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