Today we are discussing market volatility, activity in Europe, which categories look like they are better performers, and more.
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Strong market last week
Last week the market ended strong as the Eurozone extended the Greek bailout by four months. US jobless claims were lower than expected but there was weakness in manufacturing and housing starts. This could be due to the recent weather in the Northeast.
The impact of weather
Our research shows that the economic impact from weather issues will not be as bad as last year because it has been confined to the Northeast. Last year the run of bad weather covered 60-70% of the country.
What in the world did the Fed say?
This week Janet Yellen will be sitting before Congress and hopefully investors will get a clearer picture of the Fed minutes released last week. Because the minutes were very confusing, the market only reacted by moving a few points. Usually there is more market volatility from such an event. It appeared that the Fed said interest rates would not be going up any time soon. We believe Congress will try to confirm this in the meeting this week.
Market indicators to watch this week
Existing home sales and new home sales numbers will be reported this week because of it’s ripple effect on other areas of the economy. The Consumer Price Index (CPI), which measures inflation, will also be reported this week. The CPI is also a gauge for deflation which we have been talking about for over a year now. Gross Domestic Product (GDP) numbers will also be reported which is important for investors to watch as it measures everything we do in this country in regards to the economy.
No resistance in the markets
Our analysis tells us there is no resistance from a technical stand point in the market at this level. We are seeing support between the 2070 to 2060 range. What this means is that we believe if the market started trading back, buyers would step in at that level.
The cause of January’s market volatility
Our research shows that the market volatility in January was due to high frequency trading and ETFs which was about 70% of the trading. The volatility was not from long term investors. This is something investors should watch closely as it is one of many factors that contribute to market volatility.
Please send us your comments and questions.
Greg Powell, CIMA
Email Greg Powell here
Ashley Page, JD, MBA
Senior Vice President
Email Ashley Page 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.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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