Week-In-Review: Stocks End Mixed On Busy Week of Economic and Earnings Data
Stocks ended the week mixed as investors digested a very busy week of economic and earnings data. Once again, the market refused to fall in a meaningful fashion which tells me everything I need to know about how strong the market is right now. GDP was dismal, the number of cases continues to grow, and Congress failed to pass a new stimulus package which all are “bearish” headlines- instead of going down, the market moved sideways and the leading areas – soared! The Dow Jones Industrial Average (and a few important sectors) found support near the 50 DMA line – which tells you big investors are still accumulating (buying) stocks. Going forward, as long as the major indices continue trading above their respective 50 DMA lines the bulls remain in clear control.
Thursday & Friday Action:
Stocks opened lower and ended mixed on Thursday as investors digested the latest reading on GDP and waited for several huge tech giants to release earnings after the close. Before the open, the Commerce Department said the first reading on Q2 GDP plunged by -32.9%. After the close, Amazon, Apple, Facebook, and Alphabet were some of the companies that reported earnings. Stocks ended higher on Friday even though Congress didn’t pass a second stimulus package.
Market Outlook: Flood The System With Liquidity
Global governments and global central banks stepped in with massive rate cuts and other “aid” packages to help “stimulate” both Main Street and Wall Street. So far, it is working as intended. As long as March’s lows hold, the market will likely move sideways to higher. On the other hand, if March’s lows are breached, then look out below. As always, keep your losses small and never argue with the tape.