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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)-Positive
Chaikin Money Flow (CMF)-Negative
Money Flow Index-MFI-Positive
More on the Market and the Economy:
Stocks rallied on Friday following a solid jobs report, with the S&P 500 logging its best day in almost three months with a 2.05% gain, ending the week flat. Earlier in the week, the index ended the month of November with a modest .05% gain.
This week data will be released on small business optimism, business inventories, retail sales and the Job Openings and Labor Turnover Survey.
In testimony before the Joint Economic Committee, Fed Chair Janet Yellen signaled the likelihood of a December rate hike, warning of the risks of waiting too long to increase rates: “Were the FOMC to delay the start … for too long, we would likely end up having to tighten policy relatively abruptly to keep the economy from overshooting… Such an abrupt tightening would risk disrupting financial markets and perhaps even inadvertently push the economy into a recession”.
Speaking last Tuesday in Michigan, Chicago Fed President Charles Evans said that he is nervous about the Fed’s December meeting: “I admit to some nervousness about our upcoming decision. Before raising rates, I would prefer to have more confidence than I do today that inflation is indeed beginning to head higher”. He went on to say that a rate hike could be a mistake: “One possibility is that we begin to raise rates only to learn that we have misjudged the strength of the economy or the upward tilt in inflation. In order to put the economy back on track, we would have to cut interest rates back to zero and possibly even resort to unconventional policy tools, such as more large-scale asset purchases.”
The economy expanded modestly in October and November, according to the Fed’s Biege Book, as “consumer spending increased in nearly all districts” while “labor markets continued to tighten modestly.”
The Atlanta Fed’s GDPNow model is forecasting 1.5% growth in the fourth quarter, up from 1.4%.
According to the National Retail Federation, last week on Cyber Monday over 121 million holiday shoppers planned to shop online: “unlike ten years ago, we live in a world in which you can shop anywhere at any time. It’s no longer about one day, but a season of digital deals, and savvy online shoppers are ready to see what exclusive promotions retailers have in store for Cyber Monday before they checkout. Shoppers have seen promotions roll out for the past several weeks, but if the price is right on Cyber Monday, they’ll definitely show up ready to spend.” Among Cyber Monday shoppers, 24.4% planned to use their mobile device to shop, while 80% planned to use their home computer.
Source: National Retail Federation