Headlines Rule the Markets, Consumers Undaunted

Headlines Rule the Markets, Consumers Undaunted

$DIA, $SPY, $QQQ, $RUTX, $VXX

The S&P 500 fell 2.1% Friday on headline uncertainty surrounding politics and trade. As they continued to provide a justification to reduce risk.

Friday’s decliner pushed the benchmark index to a new yearly low at 2408.12 and a weekly loss of 7.1%.

All 11 S&P 500 sectors finished in the Red with the communication services (-3.1%), information technology (-3.0%), and consumer discretionary (-2.6%) groups leading the retreat.

The NAS Comp has fallen almost 22% from its 29 August highs. The tech-heavy index dropped to its lowest mark since August 2017. 

The DJIA suffered its worst week and biggest percentage fall since the financial crisis in Y 2008, down nearly 7%.

The S&P 500 is on the edge of a Bear market itself, down nearly 18% since 3 October.

On the week, the S&P 500 fell 7.05%, the DJIA dropped 6.87%, and the NAS Comp declined 8.36%.

The University of Michigan Index of Consumer Sentiment (MSI) came in at 98.3 with the final reading for December (consensus 97.5) Vs a preliminary reading of 97.5 and the final reading of 97.5 for November. That left the 2018 average at 98.4, which was the best year since Y 2000.

  • The Key takeaway from the report is that sentiment wasn’t dented with the stock market’s losses, expectations were tempered a bit on burgeoning concerns about income and job prospects.

The looming government shutdown threat, along with The Trump Administration trade advisor, Peter Navarro’s comments, overshadowed dovish remarks from New York Fed President John Williams that the Fed was open to reassessing its views, which provided a early boost to the markets then faded.

Note: Equity traders hammered by the worst sell-off since the global financial crisis in Y 2008 are poised to absorb another blast of volatility Friday when futures and options on indexes and individual stocks expire.

It is an event known as “ Quadruple Witching” that takes place every quarter. Typically it coincides with the re-balancing of the S&P 500 Index, spurring price swings and increased trading volume. All of which we saw Friday,

Friday, the major US stock market indexes finished at: DJIA -414.23 at 22445.37, NAS Comp -195.41 at 6333.00, S&P 500 -50.84 at 2416.58

Volume: Trade on the NYSE came in at 3.3-B/shares exchanged

  • NAS Comp -8.3% YTD
  • DJIA -9.2% YTD
  • S&P 500 -9.6% YTD
  • Russell 2000 -15.9% YTD

HeffX-LTN’s overall technical analysis for the major US stock market indexed for the week ended 21 December 2018 is Bearish across the board.

Have a terrific weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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