Market Direction Weekly Closing Numbers©

Market Direction: BEARISH alert issued 8/10/2017

The economy

The major U.S. indices all moved lower this week as geopolitical tensions with North Korea, declining confidence in the feasibility of tax reform, and Hurricane Irma--which is expected to hit Florida this weekend--weighed on investor sentiment. The Nasdaq led the retreat, dropping 1.2%, while the Dow and the S&P 500 finished with respective losses of 0.9% and 0.6%.

Even though the equity market settled lower for the week, it remains within striking distance of its all-time high; the S&P 500 finished Friday's session just 0.8% below its record-high close of 2,480.91. Treasuries rallied this week, sending yields to new lows for the year. The benchmark 10-yr yield dropped 11 basis points to 2.06%, hitting its lowest level since early November.

Similarly, other safe-haven assets--like gold and the Japanese yen--moved higher, jumping 1.6% and 2.3%, respectively. The yellow metal settled at a 13-month high ($1,351.10/ozt) while the dollar/yen pair finished at a ten-month low (107.78). In addition, the CBOE Volatility Index (VIX) spiked 20.2% to 12.18. The financial sector (-2.8%) was pressured by the decline in Treasury yields, but most of the remaining groups finished with losses of no more than 1.1%.

Relative strength in heavyweight names like Home Depot (HD), Exxon Mobil (XOM), and Pfizer (PFE) prevented the stock market from a significant decline, but there were some soft spots in small-cap and high-beta pockets of the market. The small-cap Russell 2000--which is seen as a leading indicator given that small-cap companies largely rely on domestic consumers--underperformed, dropping 1.0%. After pacing the stock market's post-election rally, the small-cap index now holds a year-to-date gain of just 3.1%, far below the S&P 500's year-to-date advance of 9.9%.

High-beta chipmakers also struggled, sending the PHLX Semiconductor Index lower by 2.3%. Large-cap names like Qualcomm (QCOM) and NVIDIA (NVDA) showed particular weakness, settling with losses of 4.6% and 4.0%, respectively. Still, for the year, the PHLX Semiconductor Index is higher by 20.6%.

Following this week's events, the fed funds futures market places the chances of a December rate hike at 31.9%, down from last week's 43.7%.

$tockMarketDirection proprietary model is currently BEARISH. 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.

By the numbers the weekly closing index numbers compared to the initial BEARISH recommendation closing numbers: 

Stock Market Closing Numbers
compared to Recommendation Numbers
	8/10/2017	9/8/2017	Difference
Dow Jones	21,844.01	21,797.79	46.22
Nasdaq	6,216.87	6,360.19	143.32
S&P 500	2,438.21	2,461.43	23.22

Register at: http://www.stockmarket-direction.com/