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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)-Positive
Money Flow Index-MFI-Positive
More on the Market and the Economy:
Stocks ended higher on Friday, and the S&P 500 eked out a weekly gain of .08%.
This week data will be released on new homes sales, pending home sales, consumer confidence, consumer spending and GDP.
At last week’s FOMC meeting, the Fed announced it will begin to shrink its $4.5 trillion balance sheet in October while signaling that it still plans to hike rates one more time this year.
Existing home sales slipped 1.7% in August, marking the fourth decline in five months, as a strained supply continues to weigh on the market. According to the NAR, “what’s ailing the housing market and continues to weigh on overall sales is the inadequate levels of available inventory and the upward pressure it’s putting on prices in several parts of the country. Sales have been unable to break out because there are simply not enough homes for sale…some of the South region’s decline in closings can be attributed to the devastation Hurricane Harvey caused to the greater Houston area. Sales will be impacted the rest of the year in Houston, as well as in the most severely affected areas in Florida from Hurricane Irma. However, nearly all of the lost activity will likely show up in 2018”.
Builder confidence declined this month, with the NAHB index slipping to 64 as the recent hurricanes added uncertainty. According to the NAHB, “The recent hurricanes have intensified our members’ concerns about the availability of labor and the cost of building materials. Once the rebuilding process is underway, I expect builder confidence will return to the high levels we saw this spring…Despite this month’s drop, builder confidence is still on very firm ground. With ongoing job creation, economic growth and rising consumer confidence, we should see the housing market continue to recover at a gradual, steady pace throughout the rest of the year”. Measures of current sales, sales expectations and buyer traffic fell.
The Conference Board’s leading economic index edged up .4% in August: “the August gain is consistent with continuing growth in the U.S. economy for the second half of the year, which may even see a moderate pick up. While the economic impact of recent hurricanes is not fully reflected in the leading indicators yet, the underlying trends suggest that the current solid pace of growth should continue in the near term.”
The Atlanta Fed’s GDPNow forecast for third quarter growth held at 2.2% following the release of new residential construction data.