We talked last week about how things were more positive for charts. We also talked about zigs and zags and how they are a normal part of the investing game, and after so many up days/weeks, there has to be a pullback of sorts.
Our markets both in Australia and the US experienced very mild pullbacks last week. Not enough to cause us to worry… but we’re watching… always watching…
Before we commence this weeks report, as an FYI this Momentum Monday report has three sections:
Broader market sentiment
Stocks of Interest
52 week high screen
Broader market sentiment
S&P500
I read an article in the Financial Press which said in bold letters “The S&P500 has its worst week since December” - hardly surprising given since January it's really only gone up!
S&P500 Weekly chart
Overzealous headlines and the 1.1% decline aside, there continues to be a bit going on in the US market as earnings season enters its later stages. To date more S&P500 companies have been beating expectations than not for 4Q earnings according to Bloomberg.
From a macro perspective we also learnt US payrolls increased by 517,000 for January, nearly double December's total and almost triple the consensus forecast of 185,000.
This week there is only data point that matters, which is the official inflation figure (Consumer Price Index) as everyone will be watching to see how it will affect broader rate expectations especially as Fed Chair Jerome Powell has noted that while inflation is starting to come down, it still had a ways to go.
For interest, Economists polled by Dow Jones forecast a 0.4% increase in headline CPI on a monthly basis and for a 6.2% gain from the prior year.
Back to the chart, and there isn’t much that has changed relative to the prior week. Hopefully any retracement remains mild and that the last higher high from last week isn't the last for a while. I suppose for those worried of a pullback from here they will notice the mini-resistance level that has now formed given the index wasn't able to follow through, though I wouldn't add to much weight to it.... yet.
S&P500 3 month weekly…
