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Market Direction Is Important –
Updated Chart of the S&P 500 and Secondary Signals
Of our Four secondary indicators under our MTI:
Relative Strength Index (RSI)-Negative
Chaikin Money Flow (CMF)-Negative
Money Flow Index-MFI-Positive
More on the Market and the Economy:
Stocks fell sharply on Friday on trade concerns, with the S&P 500 ending the week down 6%, marking its biggest weekly decline in over two years.
This week data will be released on pending home sales, consumer confidence, consumer spending and GDP.
As expected, the Fed raised its benchmark rate by a quarter percentage point at last week’s FOMC meeting, noting that “the economic outlook has strengthened in recent months” as the Committee anticipates that “economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong”. The central bank stuck to its script in forecasting three rate hikes this year.
Sales of existing homes rebounded in February, rising 3% to an annual rate of 5.54 million and marking the first gain in three months, even as the inventory of available homes dropped. According to the National Association of Realtors, “the very healthy U.S. economy and labor market are creating a sizeable interest in buying a home in early 2018… Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar”.
The Conference Board’s leading economic index rose .6% in February “despite a sharp downturn in stock markets and weakness in housing construction in February. The LEI points to robust economic growth throughout 2018. Its six-month growth rate has not been this high since the first quarter of 2011. While the Federal Reserve is on track to continue raising its benchmark rate for the rest of the year, the recent weakness in residential construction and stock prices – important leading indicators – should be monitored closely”.
The Atlanta Fed’s GDPNow forecast for first quarter growth held steady at 1.8% following the release of new home sales data.