The major U.S. indexes moved higher last week, with tech stocks outperforming small-cap stocks. While nonfarm payrolls came in lower than expected, signs of wage inflation helped boost investors’ appetite and push the Dow Jones Industrial Average above 25,000 for the first time in history. Price-to-earnings multiples remain a key concern for some investors, with the S&P 500’s average hitting 26.36 – the highest levels since the dotcom and mortgage bubbles.
International markets were also higher over the past week. Japan’s Nikkei 225 rose 2.76%; Germany’s DAX 30 rose 3.15%; and Britain’s FTSE 100 rose 0.28%. In Europe, the Eurozone’s manufacturing PMI rose to its highest levels on record, but inflation came in lower than many had hoped. In Asia, investors have expressed growing concern over China, Russia and Korea’s heavy dollar-denominated debt repayment schedule in the new year. (See also: International Stocks a Way to Play Inflation in 2018.)
The SPDR S&P 500 ETF rose 2.46% over the past week. After breaking out from R1 resistance at $270.50, the index reached upper trendline and R2 resistance at around $274.13. Traders should watch for a breakout from these levels to fresh all-time highs or a breakdown from R1 support to the pivot point at $264.96. Looking at technical indicators, the relative strength index(RSI) moved into overbought territory at 79.66, while the moving average convergence divergence (MACD) experienced a bullish crossover that could suggest further upside ahead.
Weekly technical summary of the major U.S. indexes. …read more
Read more here: Stocks Move Higher in First Week of Trading
Category: SPY, DIA, QQQ, IWM