Sunday, January 21, 2018

Market Direction Week of January 22, 2018©













Market Direction: BULLISH alert issued 9/21/2017

Stock on the Radar (STAR)© was launched 6/19/2017 Sunday evening. When there is a new stock recommendations for the week it is typically made available late Sunday, so investors can prepare to take a position when the market opens Monday for trading.

Last Week Review: U.S. stocks were higher for the third week in a row, even as daily fluctuations became a bit more pronounced as concerns over a potential government shutdown in the U.S. raised policy anxiety in the equity markets. Additional market volatility could also be a function of the start of the fourth quarter's earnings season. Earnings reports can prompt volatility in individual stocks, and about 15% of the companies in the S&P 500 report earnings next week.

It’s not just the election of Donald Trump that has been questioned, but this week we learned that Facebook has widened its Brexit probe to investigate whether Russia attempted to meddle in Britain’s 2016 Brexit referendum. Separately, Britain and France met this week to pledge closer cooperation on defense and security, post-Brexit. But they continued to disagree on whether London can maintain its status as the Eurozone’s financial hub, post-Brexit.

Chinese GDP in Q4 grew at a stronger-than-expected pace of +6.9%, the first annual increase in 7 years. Additionally, The Chinese yuan reached its highest level in 2 years versus the dollar. Separately, there were concerns last week that China was planning to stop purchases of US treasuries. Those fears were mostly unfounded as China, with about $1.2B in Treasuries has been the largest buyer of US debt for over 9 years with Japan a close second.

How the market finished last week, the S&P 500 up 0.9%, the Nasdaq up 1.0%, and the Dow up 1.0%.

This Week: A government shutdown is looming, and while the market actually went up during the last 3 shutdowns, the gains came mostly toward the end of the shutdown; probably due to rumors that a deal to end it, was in the works. In the near-term however, a shutdown could result in a market downturn and higher volatility next week.

At the time of this writing, mid-day Friday (1/19), lawmakers were still trying to reach an agreement to avert a government shutdown at midnight. While some odds-makers say there is greater than a 50% chance of a shutdown, recent history says a shutdown is unlikely to hurt the markets in the long-term; and it could even be bullish.

Other than the first look at Q4 GDP (which doesn’t come until Friday), next week is also a relatively light week for economic reports.

As a result, market activity is likely to be driven almost entirely by news related to the government shutdown (assuming a shutdown happens) or by earnings reports (assuming a shutdown doesn’t happen).

Earnings season grinds on, with a variety of US and UK companies issuing updates.

Key ones to watch this week include Netflix, Intel and Caterpillar in the US, and easyJet, Sky and Diageo in the UK. Events-wise, UK employment data, and central bank meetings in Japan and the eurozone are the main ones to watch for this week.

Economic Calendar: PMI Composite Flash (1/24), International Trade in Goods (1/25), Leading Indicator (1/25), Durable Goods Orders (1/26), GDP (1/26)
Some of the major earnings announcements on deck: HAL, JNJ, VZ, NFLX, NSC.

$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.

Related Link: http://www.stockmarket-direction.com/

No comments:

Post a Comment