Stock Market Awaits FOMC Decision After Moving Lower Last Week

The major U.S. indexes moved sharply lower last week amid ongoing political risks, including President Trump’s newly announced tariffs and decision to rebuild his cabinet, as well as Special Counsel Robert Mueller’s subpoena of the Trump Organization. The 30-year Treasury bond rose nearly 1%, sending yields sharply lower, as investors sought out safe-haven assets to ride out the market turbulence.

International markets were mixed over the past week. Japan’s Nikkei 225 rose 0.99%, Germany’s DAX 30 rose 0.35%; and Britain’s FTSE 100 fell 0.87%. In Europe, the regional economy appears to be very strong, but inflation remains sluggish, and the European Central Bank’s (ECB) bond buying programs may persist past September after all. In Asia, China’s economy posted stronger-than-expected gains due to export demand but continues to face debt-related risks.

The SPDR S&P 500 ETF  fell 1.67% over the past week. After briefly surpassing its prior reaction highs, the index moved lower to test the 50-day moving average at around $273.47. Traders should watch for a breakdown to lower trendline support at around $270.00 or a rebound higher to test upper trendline resistance at $280.00. Looking at technical indicators, the relative strength index (RSI) appears neutral with a reading of 53.13, but the moving average convergence divergence (MACD) has been slowly trending higher, suggesting a bullish bias over the coming week. (See also: Stock Strategies for a Highly Volatile Market.)

The major U.S. indexes saw significant declines last week as ongoing political risks affected the markets. …read more

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Category: SPY, DIA, QQQ, IWM

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