The major U.S. indexes moved sharply higher over the past week despite near record valuations and mixed economic data. Fourth quarter gross domestic product was revised sharply lower to just 2.6%, as an annualized $652.6 billion trade deficit offset strong 3.8% growth in consumer spending. The positive news is that the higher trade deficit was due to a stronger dollar, and higher consumer spending could point to higher inflation moving forward.
International markets were lower over the past week. Japan’s Nikkei 225 fell 0.8%; Germany’s DAX 30 fell 0.7%; and Britain’s FTSE 100 fell 0.83%. European Central Bank President Mario Draghi indicated that the Eurozone economy still needed support to keep increasing inflation toward healthier levels following U.S. Treasury Secretary Steven Mnuchin’s comments on a weak dollar. In Asia, China expressed disappointment with new U.S. trade tariffs.
The SPDR S&P 500 ETF rose 2.2% over the past week. After breaking out from upper trendline and R2 resistance earlier this month, the index moved to fresh all-time highs last week. Traders should watch for a further breakout to new highs or some consolidation above lower trendline support at $277.50. Looking at technical indicators, the relative strength index (RSI) moved further into overbought territory at 87.19, while the moving average convergence divergence (MACD) experienced an acceleration of its bullish upswing that could signal greater upside ahead. (See also: SPY Shorts Increase $1.8 Billion.)
The major U.S. indexes continued to surge over the past week despite high valuations and a negative GDP revision. …read more
Read more here: Stocks Move Further Into Record Territory
Category: SPY, DIA, QQQ, IWM