It was a mixed week for US equity indexes, with net weekly changes, ranging from +2.1% (Transports), +1.6% (R2K), +0.6% (NYSE comp'), +0.5% (SPX), +0.4% (Nasdaq comp'), to -0.2% (Dow). Near term outlook offers cooling of 2-3%.
Lets take our regular look at six of the main US indexes
The SPX climbed for a second consecutive week, net higher by 15pts (0.5%) at 2986. Price action since July has been tight, with a key August low of 2822, and the September high of 3021.
I would keep in mind the next Fibonacci extension of 3047. Yours truly would see ANY price action >3050 as decisively and monstrously bullish. On the flip side, equity bears need a bearish monthly close (whether October, or beyond), under the monthly 10MA, currently at 2883. The latter will not be easy, with QE4 having begun.
Tech climbed for a third week, settling +32pts (0.4%) at 8089. For confidence, the bulls need to break above the July historic high of 8339. The bears need a close <7700.
The mighty Dow was the laggard this week, settling -46pts (0.2%) at 26770. Price momentum remains a little negative.
The master index settled +79pts (0.6%) at 13006. Price momentum has remained negative since early August. Broadly stuck. Bulls need to clear the Sept'2018 high of 13261.
The second market leader - R2K, settled net higher by 24pts (1.6%) to 1536. Price action remains broadly stuck. Bulls need >1618, bears need <1450.
The 'old leader' - Transports, climbed for a second week, +216pts (2.1%) to 10508. Price momentum has turned fractionally positive.
Five of the six US equity indexes saw net weekly gains.
The two leaders - Trans/R2K, lead the way higher, whilst the Dow was fractionally weak.
More broadly, all six indexes are trading about their respective monthly 10MA.
YTD price performance:
The Nasdaq comp' remains the leader, currently +21.9% for the year. The SPX is +19.1%, Dow +14.8%, with the Transports +14.6%. The NYSE comp' is +14.3%, with the R2K lagging at +14.0%.
An extremely busy week is ahead, with a truck load of earnings.
M - HAL, AMTD, LOGI
T - MCD, PG, LMT, UPS, BIIB, CNC, UTX, JBLU, SHW, SNAP, CMG, SKX, TXN
W - BA, CLF, CAT, WM, ANTM, BX, GD, FCX, MSFT, TSLA, PYPL, F, XLNX, ALGN, LRCX, EBAY, LVS
T - TWTR, NOK, MMM, RTN, LUV, VLO, NOC, AMZN, V, INTC, GILD, FSLR, COF, AUY
F - VZ, PSX
T - Existing home sales, Richmond Fed' manu
W - FHFA house price index, EIA Pet'
T - Weekly jobs, durable goods orders, PMI comp', new home sales
F - Consumer sentiment
It should be clear, the econ-data is increasingly weak, especially outside of the US. The Fed, and other central banks cutting rates sure won't help. Yet... along with the ECB, we now have the Fed having initiated QE4. Is QE going to be enough to help push world equities upward into year end, and across 2020?
By the time you read this, the UK Parliament will have sat on Saturday, and we might have clarity of what comes next. The scenarios are broad, ranging from an agreed BREXIT deal, to an outright collapse of the government, with a new election called. The Monday open might be rather interesting.
Have a good weekend
Yours, still in the EU.
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