Stock Market Summary
Monday, March 16, 2015
Stock Market Summary:
- The stock market continued to consolidate the gains generated during February. The Dow Jones Industrial Average and the S&P 500 have dropped for three consecutive weeks, leaving both indices slightly negative for the year to date.
- The recent decline for the S&P 500 from the February 25 high to the low on March 11 is just over 3.70%. The pullback is well within the range of what is normally called a minor pullback or consolidation.
- The Nasdaq Composite, one of the largest losers last week, remains solidly higher for the year with a gain of more than 2.60%. The Russell 2000 refused to follow its larger capitalization brethren lower and finished the week higher. Since the end of January, the Russell 2000 has been higher for five of the last six weeks.
- The near vertical strength of the U.S. dollar has been impacting many of the multinational’s earnings. Last week, Intel reduced previous guidance, while analysts cutback the outlook for IBM and Microsoft as each are trying to deal with a strong dollar in a generally soft international marketplace.
- Utilities, energy, metals and basic material stocks have struggled this year as they deal with a strong dollar, declining oil prices and no inflation pressure. The dollar currently looks like it is just in the first phase of its advance. If so, it will continue to wreak havoc on commodities, many industries, multinational companies and various countries for quite some time.
- Friday is quadruple witching expiration when index options, index futures, stock options and stock futures all expire. Typically, the expiration adds additional volatility to the market’s trading throughout the week.
- The extended state that the market had reached in late February has been reduced by the past few weeks of consolidation. Further consolidation is possible, but near term support is not far off. 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.