Stocks ended mixed last week as investors digested a slew of data. First, global central banks sent mixed messages as the U.S. Fed was perceived to be slightly hawkish while Japan’s Central Bank was overtly dovish. Earnings were less than thrilling as most of the stocks that reported fell on heavy volume. Additionally, geopolitical tensions remained escalated with the rhetoric coming out of North Korea and D.C.
The German election is scheduled for Sunday. Next week will be important as investors will be looking for: GDP, Durable Goods, Consumer Sentiment and some Housing data. Technically, the Nasdaq 100 is trading near its 50 day moving average while the Dow, S&P 500 and Russell 2000 are above that important level of support.
A Closer Look at What Happened Last Week…
Mon-Wed Action:
Stocks rallied on Monday as investors waited for a busy week of economic and earnings, and central bank data. The VIX (a.k.a the volatility index) fell below 10 which is a very low reading.
Stocks edged higher on Tuesday as the Fed began its two-day meeting and President Trump gave a speech at the United Nations. Trump was very clear that he would not tolerate further aggression from N. Korea. Economic data was decent, housing starts came in at 1.180 million, beating estimates for 1.173 million.
Stocks were quiet on Wednesday after the Federal Reserve held rates steady, said it will begin unwinding its massive balance sheet in October, and it plans to raise rates in December. Elsewhere, existing home sales came in at 5.350M, missing estimates for 5.480M.
Thur & Fri Action:
Stocks fell on Thursday, led lower by the tech-heavy Nasdaq 100. The Nasdaq 100 fell to its 50 DMA line which is a logical area of support. Leading indicators grew by +0.4%, beating estimates for a gain of +0.2%.
Stocks were quiet on Friday as tensions remained high between N. Korea and the D.C. Separately, the new iPhone went on sale today but Apple’s stock remained under pressure.
Going into the weekend, the market will be watching the German election and will be watching to see if North Korea will fire another missile.
Market Outlook: Bulls Remain In Control
The bulls remain in control. Short term support is being tested on the S&P 500 and is holding up so far. For now, the market remains very strong. As always, keep your losses small and never argue with the tape.
