Weekly Market Outlook – September 12, 2016
Things were going fine last week… until Friday, when it all came completely unraveled. Friday’s 2.45% stumble in the S&P 500 (SPX) (SPY) was not only the biggest single-day loss since June when the United Kingdom voted to leave the European Union, it carried the market to its lowest close since early-July. Some key support levels were snapped too.
Bad news? Maybe, though ironically, the sheer size of Friday’s meltdown has a shot at spurring a dead-cat bounce (not unlike the post-Brexit vote plunge did). The question is whether or not such a bounce can rekindle the bigger uptrend. Friday was awful, but a 2.45% stumble isn’t enough in its own to truly hit the “reset” button for stocks.
We’ll look at it in detail below, after examining last week’s and this week’s key economic news.
Economic Data
There wasn’t much in the way of economic data posted last week. In fact, the only items of interest were last month’s ISM Services Index and July’s job openings (JOLTS) report.
The ISM Services Index rounds out the prior week’s ISM Manufacturing number. Neither was impressive, but at least the ISM Service’s score didn’t break under the crucial 50 mark. All the same, the broad trends from both are concerning.
ISM Index Chart
Source: Thomson Reuters
As for the JOLTS (Job Openings and Labor Turnover Survey) trend, though it’s two months old, it’s still showing good strength.
JOLTS (Job Openings and Labor Turnover Survey) Chart
Source: Thomson Reuters
Everything else is on the following grid:
Economic Calendar
Source: Briefing.com
The coming week will be a little busier. Highlights include last month’s retail sales, inflation, and August’s capacity utilization and industrial productivity figures.
Inflation rates remain time, though slightly on the rise. Cheap gas, oil, and food are making prices seem more contained than they really are. Taking them out of the equation we can see inflation — consumer inflation anyway — is possibly putting some pressure on the Fed to make a move.
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