Weekly Stock Market Update & SPY Technical Analysis
The government is shutdown, which means economic data is delayed. This adds vagueness to the already uncertain environment, but markets seem to be strutting along just fine.
Fueled by excitement over artificial intelligence and lower interest rates, indexes reached new records last week. OpenAI, the company behind ChatGPT, hit a record $500 billion in valuation, making it the most valuable non-public company. This obviously helped names like Nvidia and other semiconductors reach all time highs and eclipsed all worries around the government shutdown and lack of economic data.
What we should’ve gotten:
Last week, markets were expecting the latest U.S. unemployment rate, which was forecasted to be 4.3%, but the shutdown prohibited the release, leaving investors unaware of where the U.S. labor market stands. This figure is important because it helps investors gauge the odds of an interest rate cut in the coming Fed meeting. Without this figure, The Federal Reserve is left blind along with investors, and the longer the government shutdown looms, the less data we’ll have to work with. We utilize data deeply in our trading strategy as it helps us enter and exit specific sectors / industries depending on the results, without this, we must remain cautious as any surprises after the shutdown is over could be pivotal.
This week:
This week’s focus turns to The Feds. Members of the committee are expected to hold daily speeches and on Wednesday in particular, release the latest FOMC Minutes, which is a summary of The Fed’s last meeting. This summary provides further insights of the outlook each member held on monetary policy and the current state of the economy. We’ll be updating any developments in our daily morning analysis for our Hyper Stocks Pro members.
Economic reports this week:
- U.S. trade deficit (Tue)
- FOMC Minutes (Wed)
- Initial Jobless Claims (Thu)
- Wholesale Inventories (Thu)
- Consumer Sentiment (Fri)
There’s a high chance we won’t see any of this data actually get released due to the government shutdown.
SPY Technical Analysis:
As we head into the fourth quarter, historically the best performing period for the market, we are noting that SPY has yet to see a healthy pullback since its April reversal. We all love when markets go up, but seasoned traders know that a pullback should happen before we can rally into the holidays, so we are staying patient for better entry points and strategizing existing positions with a more defensive approach. We do anticipate further highs from this market, but a 5-7% correction would be welcome before the rally goes on. This will alleviate some overextended names and begin to build better set-ups.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of capital. Always do your own research or consult with a licensed financial advisor before making investment decisions.