Weekly Market Outlook – Still Defying The Odds

 

It was touch and go for the better part of last week, but when push came to shove as the weekend approached, it was the bulls doing most of the shoving. Thanks to Friday's 0.64% gain, the S&P 500 ended the week on a high note that was underscored by the NASDAQ Composite's cross above its 200-day moving average line.

The market is still vulnerable, but it's considerably less vulnerable now than it was as of Thursday.

We'll discuss why below, as always. But, let's first run down last week's economic news and preview this week's announcements. The key data remains mixed, and a couple of this week's reports have the potential to rock the market in a big way.

Economic Data Analysis

Not a lot of announcements this past week, which was shortened by the holiday. We did get a couple of noteworthy announcements though, including what ended up being a fairly predictable release of the minutes from the last FOMC meeting. The short version of the story: The Fed knows it doesn't have to be in a hyper-aggressive hurry with its rate hikes.

There were two quantifiable data nuggets to dissect though. One of them was January's existing home sales data, and the other was the prior week's report of stockpiled oil.

Existing home sales fell, from a pace of 5.0 million to only 4.94 million. But, it was a contraction at a point in time when the market really needs to see forward progress in home sales.

New, Existing Home Sales and Inventory Charts

Source: Thomson Reuters

We still don't have the new home sales figures that were not released on schedule due to the government shutdown, and no clear picture as to when we'll get that data. Most likely, it'll be released with the next regularly scheduled update the week after next. But, given the data we can see, it's unlikely the new-home sales market is much different than the existing home sales market.

Crude Oil, Natural Gas Inventory Charts

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