Weekly Market Outlook
After a scary start to the shortened trading week, Wednesday’s intraday turnaround followed-through quite nicely all the way to the end of Friday’s trading. By the time the closing bell rang that day, the S&P 500 (SPX) (SPY) had gained 1.4% after being down as much as 3.6% at one point on Wednesday.
Better still, there’s room for the market to keep rising. It’s still too soon to say this is the beginning of what will be a prolonged rally; there remains an entanglement of resistance lines all around SPX 2020. Nevertheless, this reversal presents an opportunity for the bulls.
We’ll serve up the details of this rebound effort after a closer look at last week’s and this week’s economic news.
Economic Data
We got a fair amount of economic news last week, but only a couple of items were hard-hitting.
As for inflation, there’s none to speak of… with or without the price of oil factored in. Overall inflation fell 0.1% in December, and on a core (ex food and energy) basis is was only up 0.1%. The annualized inflation rate now stands at
The only chart-worthy data from last week was December’s housing starts and building permits. They were good. The uptrend continues on both fronts.
Housing Starts & Building Permits Chart
Source: Thomson Reuters
All the other data is on the following grid:
Economic Calendar
Source: Briefing.com
This week is going to be busier, with four biggies in the cards.
On Tuesday we’ll get November’s Case-Shiller Index (of home prices) as well as the FHFA Housing Price Index. Both have been trending higher for a while, and are apt to keep moving in that direction.
We’ll also get a first look at the status of consumer sentiment on Tuesday, beginning with the Conference Board’s consumer confidence score for January; economists are looking for a modest uptick. We’ll also get the third and final reading of the Michigan Sentiment Index on Friday. The pros are looking for a small uptick there too. Consumers’ moods are, or at least were, in an uptrend. The recent market action may have shaken them up a bit. One bad month doesn’t make a trend though.
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