Stock Market Summary
Monday, March 20, 2017
- After many weeks of sideways trading and underperformance by the Russell 2000 compared to the S&P 500, the trend reversed. The Russell 2000, which is representative of the smaller capitalization stocks, had a strong week outperforming the other major market indices.
- The Russell 2000 gained nearly 2% for the week. The Dow Jones Industrial Average and the S&P 500 were up less than 0.25%, while the Nasdaq Composite gained just under 0.70%.
- In a reversal from the prior week, REIT’s and utilities were the sector leaders. Consumer discretionary was third best. The sectors suffering the largest declines for the week were the financial and healthcare sectors.
- The energy sector has really struggled since hitting a recent high in the middle of December. The sector has now been down eleven of the past fourteen weeks. The weakness in natural gas and the recent decline in oil has made it difficult for that sector to turn back higher.
- Friday was quadruple witching expiration and typically the Wednesday before is where most of the activity seems to take place. Last Wednesday was no exception with big gains for the day as market participants were not only reacting to the expiration, but to the statement and press conference that followed the conclusion of the two day Federal Reserve Open Market Committee meeting.
- The bias remains to the upside for the stock market. A successful break to new highs for the Russell 2000 this week would expand the advance across the general market.
- The stock market’s short, intermediate and long term trends are all higher. Pullbacks of 2-4% from intraday highs to lows could occur at any time.
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.