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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:
Stocks closed higher on Friday, and the S&P 500 finished the week with a .3% gain, snapping a three-week losing streak.
This week data will be released on new home sales, pending home sales, durable goods and GDP.
The minutes from the Fed’s April FOMC meeting showed that most committee members are on board for a June rate hike if economic data looks good: “Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen, and inflation making progress toward the Committee’s 2% objective, then it likely would be appropriate for the Committee to increase the target range for the federal-funds rate in June”.
Inflation climbed .4% in April, marking the biggest increase in three years. Energy prices rose 3.4% while the cost of food ticked up .2%.
The Atlanta Fed’s GDPNow model is forecasting growth of 2.5% for the second quarter after the release of data on housing starts.
Builder confidence held steady in May, with the NAHB index at 58 for the fourth month in a row. A gauge of sales expectations jumped, while measures of current sales and buyer traffic were unchanged. According to the NAHB, “The fact that future sales expectations rose slightly this month shows that builders are confident that the market will continue to strengthen. Job creation, low mortgage interest rates and pent-up demand will also spur growth in the single-family housing sector moving forward.”
Existing home sales rose 1.7% in April to an annual rate of 5.45 million. According to the National Association of Realtors, “sales activity overall was at a healthy pace last month as very low mortgage rates and modest seasonal inventory gains encouraged more households to search for and close on a home”.
After slipping in March, housing starts rebounded in April, climbing 6.6% to an annual pace of 1.17 million. Permits for future construction rose modestly to an annual rate of 1.12 million.