Market Direction: BULLISH alert
issued 11/10/2016
Dow, S&P 500, and Nasdaq close at records...
U.S.
stock-market indexes pushed further into record territory, with the main
benchmarks closing at fresh all-time highs Wednesday.
The
main benchmarks held on to earlier gains after the minutes from the latest Federal
Reserve meeting showed a distinct lack of unity over the central bank’s
projection of three rate hikes in 2018.
Some
policymakers think three rate hikes would be too aggressive, while others think
such a pace would be too slow.
What
are stock indexes doing?
The
S&P 500 SPX, +0.64% rose 17.26 points, or 0.6%,
to 2,713.07 to close at a new record for the second session in a row this year.
Eight of the 11 main sectors finished in positive territory, with energy and
technology shares leading the gains, up more than 1%. Telecoms and utilities
shares were hit hard, however, falling 2.2% and 0.8%, respectively.
The
Dow Jones Industrial Average DJIA, +0.40% advanced DJIA, +0.40% 98.67 points, or 0.4%, to
24,922.68, also marking a closing record. The blue-chip index is less than 100
points away from trading above 25,000.
The
Nasdaq Composite Index COMP, +0.84% rose 58.63 points, or 0.8%,
to 7,065.53. The tech-heavy index has gained 2.4% over the past few sessions.
All
three benchmarks closed at records together for the first time in 2018.
Wednesday’s
session was marked by subdued volatility. The CBOE Volatility Index VIX, -6.35% , which measures implied
volatility on the S&P 500, closed below 9 for the first time ever.
What’s
driving the markets?
The
positive trading mood from 2017 appeared to continue into 2018, with stocks in
Asia and the
U.S. kicking off the new year on a strong note. European stocks rose Wednesday while Asian
markets also closed with gains.
Markets
got an additional boost from data showing expanding manufacturing activity in
December and an uptick in construction spending in November. Meanwhile, the
minutes from the Fed’s latest meeting suggested the central bank will continue
to raise rates gradually.
The
global stock advances came even amid geopolitical uncertainty in Iran, where at
least 22 people have died in protests against the government. On Wednesday,
tens of thousands of people took to the streets for pro-government rallies
across the country, voicing their support for Supreme Leader Ayatollah Ali
Khamenei.
The
protests started last week over rising inflation and corruption, but the focus
has since shifted to a wider discontent with Iran’s ruling system and Khamenei.
The wave of unrest is now seen as the largest since a disputed 2009
presidential election, and it could filter into markets if it leads to a
disruption to the region’s oil industry.
What’s
coming up on the economic calendar?
The Federal Reserve in December forecast three rate hikes in
2018, but minutes showed that policymakers were divided about the
pace of rate increases.
Some
thought three hikes were too aggressive and that they would tighten monetary
conditions too soon. Meanwhile, others thought the pace of rate hikes was too
slow. The market is pricing in the first rate hike of 2018 at the March
meeting, according to the CME Group’s data.
The
ISM manufacturing index rose to 59.7% in December from 58.2 in November.
Construction spending ticked up 0.8% in November and was 2.4% higher
year over year.
Domestic car companies collectively reported lower U.S.
sales in December, signaling the auto industry’s 2017 tally fell
short of the record set in 2016 and represented the first annual decline since
the financial crisis eight years ago.
What
are strategists saying?
“What
we are seeing is a typical continuation of a Santa Rally, with new money coming
into equity funds,” said Quincy Krosby, chief market strategist at Prudential
Financial.
“The
question we get asked the most now is what can spark a normal pullback, since
we haven’t had one in a while. The answer is the Fed and whether inflation will
creep up to the extent the Fed has to tighten more than three times this year,”
Krosby said.
What
are other markets doing?
The dollar selloff paused, with the ICE dollar
index DXY, +0.07% up 0.3% at 92.182.
West
Texas Intermediate crude oil CLG8, +0.34% rose 2.3% to $61.77 a barrel,
while gold futures GCG8, -0.61% added 0.1% to $1,317.50 an
ounce.
Bitcoin
futures BTCF8, +1.24% added 1% to $15,000, adding to a
2.7% rise from Tuesday that came after report that Founders Fund, led by
venture-capital luminary Peter Thiel, had amassed a stake in the digital currency.
Stocks in Asia closed in positive territory,
while European stocks broadly traded higher.
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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 (9/21/2017)
|
||
Dow
|
up 2,582.69 points a 11.55% gain
|
1/3/18
|
Nasdaq
|
up 646.46 points a 10.07% gain
|
1/3/18
|
S&P 500
|
up 213.77 points a 8.55% gain
|
1/3/18
|
Related Link: http://www.stockmarket-direction.com/
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