Daily Market Update – August 16, 2016 (Close)
The futures were pointing to a flat open this morning as the market finished yesterday off from its highs, but still managing to post all time closing highs once again in all three major indexes.
That grind higher has been continual ever since we got over the “Brexit” vote and learned to move the market higher even in the absence of news.
With retailer reports still coming in this week, the morning started with DJIA component Home Depot reaffirming guidance.
Based on the way the market received last week’s retail news in which retailers surged higher on basically flat earnings and downgraded guidance, you would think that there would be a push to go much higher this morning, at least in that one stock.
But that wasn’t the case today.
Not only for the market, but neither for Home Depot itself.
Maybe everyone always expects too much from them and have settled on lowered expectations for most everyone else.
It will be interesting to see how Wal-Mart is greeted this week as it has had lowered expectations for a while at this point.
In the meantime, with tomorrow being the release of the FOMC minutes it’s hard to know where the real push to go higher will come from easy as those who bet on those sort of things pushed up the likelihood of a September increase today and did so by 100%.
Now, the expected chance of such an increase is at 18%, following some words today from Federal reserve Presidents Dudley and Lockhart.
Other than the past 2 months Employment Statistics Reports, there really hasn’t been much news to validate the idea that the economy is expanding at a rate that might warrant the FOMC getting ready to roll out another rate hike, but at least one voting member expressed an opinion that one is likely.
For those that had good reason to expect multiple such rate increases in 2016, we are now facing the final 4 months of the year without having had a single one.
At the current record levels it’s hard to see anything other than disappointment as any kind of news comes in, given how the market has mostly been paradoxical in its responses over the past few years.
The only logical response at this point would be to drop that contrarian response to economic news and see the good as good and the bad, as bad.
I don’t know if that will start to happen this week.
After yesterday’s gain, but no real opportunity to do anything constructive, I don’t really know what the rest of the week will bring, other than having to watch two expiring positions.
I suppose I could do that from the beach.