Click here for the Weekly Wrap by Briefing.com.
BOTTOM LINE: Overall, last week's market performance was modestly positive, considering the rise in energy prices. The advance/decline fell slightly, sector performance was mixed and volume was above average. Small-cap, Cyclical and Tech shares all outperformed for the week as worries over a substantial economic slowdown diminished. As I stated last week, sentiment towards crude oil was too bearish for the underlying commodity to continuing declining at such a rapid pace. A retest of recent highs appears likely before the decline I see in the second half of the year. Measures of investor anxiety were mostly lower on the week. The fact that AAII % Bulls rebounded so strongly with the S&P 500 hitting a new yearly low on Wed. is a mild negative. Investors appear to be ratcheting down their future inflation expectations, even with last week's decline in the US dollar and rise in commodity prices. While I continue to believe the major indices have seen their lows for the year, Friday's action was disheartening for the bulls. However, volume was relatively light and most of the sell-off was related to news of a potential nuclear weapons test by N. Korea. If the lows are truly in, a bounce should be in order early next week.
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