Week in Review: Another Record Setting Week on Wall Street… 06/03/2017


The major averages remain exceptionally strong as the market simply refuses to decline in any significant fashion. Comey is set to testify next week and that is the next big wild card for the market. In the short term, last month’s lows are the next level of support to watch, then the 50 DMA line for the S&P 500, Dow Industrials, Nasdaq Composite, and Nasdaq 100. Then, the next important levels of support to watch are: Russel 2000: 1351, then 1335, then 1308. The Dow Industrials: 20.6K, then 20.4k, S&P 500: 2352, then 2322.25, Nasdaq Composite: 5995, then 5805, then 5769.39. Until those levels are breached on a closing basis, the bulls remain in control on a short, intermediate, and long term time-frame.

We are often asked about why the market is holding up so well with everything that is happening in the political arena. The answer is simple: investors only care about what policies come out of D.C. that directly impact Main Street or Wall Street. So far, the policies have been bullish for the economy and, as investors look forward there appears to be more economic-friendly policies in the pipeline. As previously mentioned, the other, more important, reason is that we are in a very strong bull market, and we pay much more attention to how the market reacts to the news.


A Closer Look at What Happened Last Week…

Mon-Wed Action:

Stocks were closed on Monday in observance of Memorial Day. 

Stocks were quiet to slightly lower on Tuesday as the tech-heavy Nasdaq composite snapped a 7-day win streak. Personal income rose 0.4% in April, which matched expectations, and consumer spending rose by 0.4%. The personal consumption expenditures price index, which is what the Federal Reserve likes to look at to measure of inflation, rose 0.2%.

Wednesday was another very quiet day on Wall Street as May officially came to an end. Economic data was mixed. Pending home sales fell -1.3% in April, missing estimates for a +0.5% gain. Chicago PMI came in at 59.4, beating estimates for 57.5. Separately, The Federal Reserve released its BeigeBook which showed waning optimism in several of the Fed’s 12 districts. The report said consumer spending is softening in many districts and the economy may be “flattening out.”

Thur & Fri Action:

Stocks jumped nicely on Thursday helping the S&P 500 and the Nasdaq composite hit fresh record highs. Before Thursday’s open, ADP, the country’s largest private payrolls company said private employers added 253,000 new jobs last month which easily beat the Street’s estimate for 170,000. In the afternoon, President Trump said he is pulling out of the Paris Climate Agreement and wants to renegotiate.

Stocks rallied on Friday after the Labor Department said U.S. employers added 138,000 jobs in May which missed estimates of 185,000. Meanwhile, the unemployment rate fell to 4.3%, down from 4.4% and that was the lowest level since 2001.


Market Outlook: Stocks Are Strong

The market is very strong. As always, keep your losses small and never argue with the tape.




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