Stocks were down last week
Stocks were down last week because of low earnings reports. Energy companies continue to be a drag on the markets, as oil is down 5 1/2 percent. On the positive side the initial jobless claims reached a 42 year low. We still, however, are waiting for wage growth to catch up with the number of job openings.
Get a feel for where the market is headed
The reports that are coming out this week that will help us get a feel for where the market is going will come from Durable Good Orders, GDP, Jobless Claims, and the Fed meeting report. We are always looking at price performance of stocks on the S&P 500 for possible places where buyers will step in. Right now that could happen around the 2050 – 2040 range. Below that would be in the 1900 – 2000 range. There is support at 2070. We will be watching these levels to try to get a feel for where the market is headed.
People are not feeling wealthy
We still maintain our position that the Fed will find it difficult to raise interest rates any time soon. While there are many positive things going on in the markets, the inflation rate is still below the Fed’s target of 2%. Inflation has been low for three years now going back to 2012. This can be good and bad depending on how you look at it.
So why has inflation continued to be an issue? We can see people are paying down debt but they are not spending money on consumer goods. This could be because wages have not gone up so people do not feel as wealthy. Inflation happens when there is more money chasing too few goods. We haven’t had this dynamic since 2007. People are not feeling wealthy at this time. This is why we think Janet Yellen will have a hard time finding enough inflation in the numbers to justify raising interest rates.
Please send us your comments and questions about where you feel the market is headed.
Franklin Bradford, CMT
Senior Vice President
Email Franklin Bradford here
fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
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