Craig Johnson’s

Stock Market Summary

Monday, July 18, 2016

  • The major stock market indices were positive last week with most sporting a gain of more than 1% for the week. The Russell 2000 gained over 2%. The S&P 500 and the Dow Jones Industrial hit all-time highs.
  • For much of the year institutions and hedge funds have been quick to buy beaten down sectors and stocks with many being viewed as value or defensive investments. Recently, it appears a shift is beginning to take hold in which growth is once again being viewed as a favorable investment. This shift in strategy benefits what had been the laggard index, the Russell 2000, which is made up of small capitalization stocks. It also gives a boost to the Nasdaq Composite and the Nasdaq 100 Index, which have also lagged in performance during 2016. A shift to growth could also give the stock market the next boost it will need to continue to rally.
  • The financial sector reacted well to earnings results from the large banks that were released last week. The reports were better than expectations even though the earnings were quite poor and difficult to be enthusiastic about.
  • The number of second quarter earnings results that will be released this week will be a bit more numerous compared to last week. It does appear the largest number of companies reporting will fall into the last week of July and the first week of August.
  • The stock market has become slightly extended in the short term leaving the possibility that a mini 2-4% pullback from high to low (2169 to a possible low of 2128, 2000 or 2085 on the S&P) could occur shortly. The S&P 500 closed Friday near 2162.
  • The short, intermediate and long term trends are all higher.  

Sources:,,, Dow Jones News, Financial Times,, Investor's Business Daily,,, Thomson Reuters/First Call, U.S. Dept of Treasury, 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.