Stock Market Summary
Monday, September 21, 2015
- Stocks generally were higher for the week, but much of the gain dissipated on Thursday, as the stock market moved lower after the Federal Open Market meeting conclusion and Friday’s quadruple expiration.
- For the week, the Nasdaq Composite and the Russell 2000 showed gains of less than 1%, while the S&P 500 and the Dow Jones Industrial Average registered losses of under 0.5%.
- On Thursday, the Federal Open Market Committee decided against raising interest rates at this time. By not increasing rates now, it makes it less likely an increase will take place this year. A two day meeting is scheduled in late October and another in mid-December. The thought is that if no rate increase takes place at the October meeting it is unlikely the Federal Reserve would raise rates in the midst of the holiday shopping season in December. Even though many seem to be of the belief that the Federal Reserve will only raise rates when a meeting is scheduled, keep in mind they can raise rates at any time.
- The financial sector has been under pressure all month. An interest rate increase had been built into the prices of stocks in the financial sector. The diminishing likelihood during the weeks before the meeting of an interest rate increase had been pressuring financials. The confirmation of no increase added to the weakness. A rate increase would have given a boost to the financial sector’s earnings.
- Since the decline got underway in August the stock market has experienced significant technical damage. It currently is in the process of repairing itself and building a base that it can begin to move higher from in a sustainable way. Many individual stock leaders are in a similar state. Further volatility (sharp moves higher and lower, even a possible retest of recent lows) is likely during the next couple of weeks as the healing process continues.
- The market currently is in a sideways short-term trend, but the intermediate and long term trends remain higher.
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.