Stocks Quiet Ahead Of The Hurricane
The stock market remains very strong. The major indices slid last week but were quiet as the country waits for Hurricane Irma to hit Florida and parts of the East Coast. Stepping back, the action remains healthy as the market continues to trade just below record highs and sellers remain at bay.
From where I sit, the market action remains bullish. The fact that the market refuses to fall in any significant fashion illustrates how strong the bulls are right now. Additionally, it is bullish to see volume dry up as the Dow, S&P 500 and Nasdaq sit on their respective 50 day moving average lines. It is important to note that the Transports and the small-cap Russell 2000 continue to underperform their peers which is not ideal. Until we see any heavy volume selling, the bulls remain in clear control.
A Closer Look at What Happened Last Week…
Mon-Wed Action:
Stocks were closed on Monday in observance of the Labor Day Holiday. Stocks fell hard on Tuesday tensions spread regarding North Korea firing another missile. In the U.S., Factory Orders fell -3.3%, missing estimates for a decline of -3.2%.
Stocks bounced back on Wednesday after the bulls showed up and defended the 50 DMA line for the Dow and S&P 500. Politically, two top Democratic leaders said they would support President Trump’s debt ceiling extension and government funding plan. Separately, Federal Reserve Vice Chair Stanley Fischer resigned due to personal reasons. Economic data was mixed. The PMI services index came in at 56, missing estimates for 56.9. Separately, the ISM non-manufacturing index came in at 55.3, missing estimates for 55.8. The Fed’s Beige Book came out and showed Modest to moderate economic growth and offered a different assessment on the impact of Hurricane Harvey. Finally, the market shifted its focus to Hurricane Irma. Sir Richard Branson survived the Hurricane holed up in his concrete wine cellar.
