Weekly Market Outlook - We Ended The Week On A Low Note, But...

The market spent the better part of the week right at breakeven levels. But, when push came to shove on Friday and traders had to make a commitment, they chose to be out rather than in. Friday's 0.49% setback for the S&P 500 was essentially the loss for the week.

It's possible Friday's triple-witching expiration of monthly as well as quarterly futures and options sparked the weakness, and that's certainly what sparked the volume surge. That, however, is also what makes the whole day a bit suspicious. We still have to start this week where we left off last week -- which isn't in great shape -- but there's no clear clue about what traders are actually thinking here.

On the flip side, this is traditionally a tough time of year for stocks.

We'll weigh it all below, after recapping last week's most important economic announcements and previewing this week's economic news.

Economic Data Analysis

It was  fairly busy week last week in terms of economic news, with the biggest news of course being the decision in the middle of it to cut interest rates. The Fed Funds Target Rate was lowered by a quarter of a point, to a targeted range of between 1.75% and 2.0%. Not all investors or analysts are convinced the economy needed that boost, though it likely can't do harm.

But, first things first. On Tuesday we heard what was arguably more important data for the stock market -- last month's industrial output and utilization of our factories' production capacity. Both were up (rather firmly) versus expectations ... a much-needed signal that the economy is doing well enough to prod industrial earnings upward.

Capacity Utilization and Industrial Production Charts

Source: Thomson Reuters

On Wednesday, aside from the rate cut, we also got another piece of encouraging information that was obscured by bigger headlines. That is, housing starts and building permits both surged, suggesting recent near-record lows in borrowing rates prompted new demand for home purchases, In fact, each measure moved to their highest reading since 2007, when both were on the way down.

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