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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)-Positive
Money Flow Index-MFI-Negative
More on the Market and the Economy:
The S&P 500 closed lower on Friday as the market digested comments from Fed Chair Janet Yellen and Vice Chair Stanley Fisher. The index ended the week down .7%, marking the second consecutive weekly loss.
This week data will be released on consumer spending, the trade deficit and the jobs report.
Speaking at the Fed’s Jackson Hole summit, Chair Janet Yellen signaled an upcoming rate hike, stating that “in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal-funds rate has strengthened in recent months”. Yellen added that any rate hike decision “depends on the degree to which incoming data continues to confirm the Fed policy committee’s outlook”.
The economy grew 1.1% in the second quarter, slightly slower than previously reported, as businesses ran down inventories and imports were higher than estimated.
The Atlanta Fed’s GDPNow model forecast for third quarter growth slipped to 3.4% following data on existing home sales.
Existing home sales fell 3.2% in July to an annual pace of 5.39 million as tight inventory continued to weight on the market. According to the National Association of Realtors, “severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country last month”. The market is seeing “diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers.”
Sales of new homes surged 12.4% to an annual rate of 654,000 – the highest level in almost eight years. While sales rose, the supply of new homes on the market slipped to a 4.3 months’ supply.