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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:
After a record close last Tuesday, stocks finished lower on Wednesday following the Fed’s FOMC meeting announcement. Stocks closed lower on Friday after reports that China seized a US Navy drone, and the S&P 500 ended the week down .1%.
This week data will be released on existing home sales, consumer spending, new home sales, GDP and the Conference Board’s leading economic indicators.
The Fed raised its key interest rate for the first time in a year in a unanimous decision at last week’s FOMC meeting. At the same time, the central bank signaled a faster pace to rate hikes in 2017, with the ‘dot plot’ now showing three hikes next year, up from a previous forecast of two.
Small business optimism soared after the election, with the NFIB optimism index climbing to 98.4. According to the NFIB, “Before Election Day small business owners’ optimism was flat, and after Election Day it soared… If higher optimism can be sustained…in the coming months we’ll see an increase in business activity, such as hiring and expanding”.
Among the index components, one slipped, one was unchanged and 8 posted gains.
The Atlanta Fed’s GDPNow model forecast for fourth quarter growth rose to 2.6% following the release of consumer price data.
Home builder confidence jumped to an 11-year high in December, as the NAHB index rose to 70 – the highest since July 2005. Measures of buyer traffic, current sales and the six-month outlook all rose to 11-year highs. “This notable rise in builder sentiment is largely attributable to a post-election bounce, as builders are hopeful that President-elect Trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability. This is particularly important, given that a recent NAHB study shows that regulatory costs for home building have increased 29 percent in the past five years”, according to the NAHB.
The cost of living rose in November, with inflation rising .2%, driven by gas and housing costs, and marking the fourth straight monthly gain.