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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 closed lower on Friday, with the S&P 500 posting a .7% decline for the week.
This week data will be released on new home sales, existing home sales, and durable goods.
The minutes of the Fed’s July FOMC meeting showed that officials can “afford to be patient” on rate hikes as there is “some likelihood that inflation might remain below 2 percent for longer than they currently expected”. Officials agreed to hold off an announcing a plan to reduce the Fed’s $4.5 trillion balance sheet; while a few members wanted to announce a start date at the July meeting, “most preferred to defer that decision until an upcoming meeting while accumulating additional information on the economic outlook”.
After increasing .6% in June, the Conference Board’s leading economic index increased .3% in July. According to the Conference Board, “the U.S. LEI improved in July, suggesting the U.S. economy may experience further improvements in economic activity in the second half of the year. The large negative contribution from housing permits, a reversal from June, was more than offset by gains in the financial indicators, new orders and sentiment”.
Builder confidence picked up in July, with the NAHB index jumping 4 points to 68. According to the NAHB, “the fact that builder confidence has returned to the healthy levels we saw this spring is consistent with our forecast for a gradual strengthening in the housing market. GDP growth improved in the second quarter, which helped sustain housing demand. However, builders continue to face supply-side challenges, such as lot and labor shortages and rising building material costs”. Measures of current sales, sales expectations and buyer traffic posted gains.
The Atlanta Fed’s GDPNow forecast for third quarter growth edged up to 3.8% following last week’s residential construction data.