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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-Positive
More on the Market and the Economy:
After a Thursday afternoon selloff following the release of first quarter GDP, the S&P 500 slipped on Friday, ending the week down 1.26% but finishing April with a .27% gain.
This week data will be released on manufacturing, construction spending, the trade deficit, the service sector and the jobs report.
After expanding 1.4% in the fourth quarter, the economy grew .5% in the first quarter this year, the slowest pace in two years, on a slower inventory build and lower exports.
For the third time this year, the Fed held interest rates unchanged, leaving the option on the table for a June rate increase. The FOMC expects that “economic activity will expand at a moderate pace and labor market indicators will continue to strengthen”. The committee anticipates two rate hikes this year.
The first forecast of the Atlanta Fed’s GDPNow model for growth in the second quarter is 1.8%.
Americans continued to pocket their extra income in March, as consumer spending rose a slight .1% while incomes increased .4%. The savings rate climbed to 5.4% – the highest since 2012.
Pending home sales rose for the second consecutive month in March, increasing 1.4% to a 10-month high. According to the National Association of Realtors, “Despite supply deficiencies in plenty of areas, contract activity was fairly strong in a majority of markets in March. This spring’s surprisingly low mortgage rates are easing some of the affordability pressures potential buyers are experiencing and are taking away some of the sting from home prices that are still rising too fast and above wage growth.”
At the same time, new home sales slipped last month, dipping 1.5% to an annual rate of 511,000. On the upside, March marked the fourth consecutive month with sales above 500,000 for the first time since the recession. The inventory of new homes rose to a 5.8 months supply at the current sales pace.