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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:
The market started the Trump presidency in the green, closing with gains on Friday, however, the S&P 500 finished the week down .2%, marking the second consecutive weekly decline.
This week data will be released on existing home sales, GDP, new home sales and the Conference Board’s leading economic indicators.
Speaking last Wednesday, Fed Chair Janet Yellen said that the economy is close to the central banks objectives: “It is fair to say the economy is near maximum employment and inflation is moving toward our goal”. Yellen also said that the FOMC anticipates rate increases a few times a year until the end of 2019.
Inflation is picking up, according to the Fed’s Beige Book, as “pricing pressures intensified somewhat” at the end of 2016 while the economy continued to grow at a modest pace.
The Atlanta Fed’s GDPNow model forecast for fourth quarter growth held at 2.8% following the release of residential housing data.
Builder confidence slipped this month but remains on solid ground, as the NAHB housing market index declined to 67 with measures of current sales conditions, sales expectations and buyer traffic edging down. According to the NAHB, “builders begin the year optimistic that a new Congress and administration will help create a better business climate for small businesses, particularly as it relates to streamlining and reforming the regulatory process”.
Consumer prices rose .3% in December, and with that inflation increased 2.1% in 2016, driven by rising rents, gas prices and medical care.
Housing starts surged 11.3% in December to an annual pace of 1.23 million, marking the second highest pace of the recovery. At the same time, however, building permits slipped to a rate of 1.21 million.