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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:
While the Nasdaq grabbed all the headlines as it closed at a record high for the second straight day on Friday and posted a 4.25% gain for the week, the S&P 500 posted a gain as well, finishing the week up 2.4%, marking its best week in four months.
This week data will be released on existing home sales, house prices, new home sales and the Conference Board’s leading economic indicators.
According to the Federal Reserve’s Beige Book, economic activity continued to expand from May through June, as lower energy prices helped consumer spending, but weighed on manufacturing. “Reports continued to reflect decreases in oil and natural gas drilling activity in Cleveland, Minneapolis, Kansas City and Dallas. Reports of capital spending declines continued…resulting in some labor cutbacks”, according to the report.
On the first day of her semi-annual testimony to Congress, Fed Chair Janet Yellen told members of the House Financial Services Committee that the Fed is likely to raise rates this year, and that the first rate hike “will signal how much progress the economy has made in healing from the trauma of the financial crisis”. She emphasized that the timing of the first hike is not as important as the pace of subsequent increases, and that waiting too long could force the Fed to tighten at a faster pace: “We also want to be careful not to tighten too late because, if we do that, arguably we could overshoot both of our goals and be faced with this situation where we would then need to tighten monetary policy in a very sharp way that could be disruptive”.
Seriously delinquent mortgages fell to the lowest level in eight years, according to CoreLogic. The number of mortgages in serious delinquency dropped 22.7% on a yearly basis in May to 1.3 million loans. “Because fewer loans are becoming seriously delinquent, the foreclosure inventory has come down to its lowest level in more than seven years, with only 1.3% of loans in foreclosure proceedings”, according to CoreLogic’s National Foreclosure Report. At the same time, completed foreclosures fell 19.2%, with 41,000 foreclosures in May. Since the start of the financial crisis, around 5.7 million foreclosures have been completed.
While banking crises are unfortunately not uncommon, government imposed bank closures are, according to Pew Research. Out of 147 banking crises, governments froze deposits or ordered banking holidays 7 times.
Americans will spend less on back-to-school shopping this year, according to the National Retail Federation, with spending expected to reach $68 billion – a 9% decline compared to last year’s projection.