Craig Johnson’s

Stock Market Summary

Monday, February 9, 2015

  • The major stock market indices held support at Monday lows, reversing and moving sharply higher through the remainder of last week. The market indices reached and penetrated significant resistance on Friday, but were repelled leaving the stock market lower for the day.
  • Friday’s decline marked the third consecutive week that the market has declined on Friday as measured by the S&P 500. Only one Friday of the six that have occurred so far this year have closed higher.
  • The sharp advance last week erased the negative performance for the indices during 2015 and left them slightly higher for the year. The only exception was the S&P 500, which is slightly negative for the year to date.
  • Last week, the news was dominated by companies’ earnings reports and outlooks. Many multinational companies are being impacted by the strong U.S. dollar, especially energy companies. This is likely to be a factor for the next few quarters. The overall rate of profit growth because of this will be low, but positive, somewhere in the 2 -5% range.
  • The strong U.S. dollar should help the stocks of companies that have less multinational exposure. Typically, these are companies that are smaller than the large capitalization companies that did so well in 2014.
  • This week could be very exciting for the stock market if the overhead resistance barrier can be exceeded and sustained. If that occurs, the potential exists for an explosive move higher.
  • The intermediate (weekly to monthly) market bias remains positive for the stock market.  

Sources: bankrate.com, bloomberg.com, briefing.com, Dow Jones News, Financial Times, finviz.com, Investor's Business Daily, marketwatch.com, seekingalpha.com, Thomson Reuters/First Call, U.S. Dept of Treasury, yahoo.com and individual company web sites and press releases.

Leonetti & Associates, LLC views or opinions are as of a certain date and subject to change without notice.  The material contained herein is for informational purposes only and obtained from sources we consider reliable. We make no guarantee as to its accuracy or completeness.  References to specific securities and industries/sectors should not be considered recommendations to buy or sell any security or advisory service.  Past performance is not a guarantee of future results.

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