A man goes by the New York Stock Exchange during a rain storm in New York February 24, 2016.
With the S&P 500 again resembling a record today prior to falling back, investors will turn next week to a full slate of economic information and a Federal Reserve meeting in hope of fresh factors whether to drive stocks to brand-new highs. The benchmark large-cap index flirted with the existing record when a rally to begin the week brought it to its highest in about 11 months. However the run fizzled on Thursday and Friday, making it the most recent time the index has climbed up above 2,100 before falling back from the Might 21, 2015 closing record of 2,130.82. “Equities are having a tough time finding a rationale to punch through to a new high,” said Peter Kenny, senior market strategist at Worldwide Markets Advisory Group in Berkeley Heights, New Jersey. Next week brings the release of important U.S. economic data, including retail sales and inflation. “We need to see something consistently good or bad to move the markets in a direction,” said Peter Costa, president of Empire Executions. “Right now we haven’t got that.” With the S&P 500 closing south of 2,100 today after touching 2,120 earlier, Katie Stockton, primary technical strategist at BTIG in New York, sees the move as an unsuccessful effort of a breakout that is setting the index for more declines.
” Tested twice, 3 times, makes it more apparent to be a strong resistance level,” Stockton stated. “There’s suppressed selling pressure there.” After a bad start to the year, the S&P 500 has actually rallied more than 15 percent since mid February, helped by a rebound in oil rates to over $50 a barrel. On Friday, the S&P ended within about 35 points of the record. But even if the index eclipses the record next week, not everybody is viewing it as an indicator that stocks are poised to then shoot higher.
” It’s an encouraging indication, but not a bullish green flag that indicates we’re going on to major gains in the short-term,” stated Bruce McCain, chief financial investment strategist at Secret Private Bank in Cleveland. Financiers continue to be dramatically concentrated on when the Fed will next raise interest rates, although they are marking down any opportunity that the United States reserve bank will act next week. According to the CME Fedwatch website, traders see just a 2 percent possibility the Fed will raise rates on Wednesday, and 21 percent opportunity it will do so at its July conference. Expectations fell significantly after a miserable employment report previously this month triggered fresh issues about the economy’s strength.
Retail sales “will offer us a little bit more insight into just how much customers are pulling back, if they are, or whether that employment number was more an aberration in the pattern and we still have quite solid lead to keep us progressing,” McCain stated. Britain’s referendum on whether to stay in the European Union could significantly fray investor nerves as the June 23 vote nears. The Brexit vote, along with renewed growth concerns for the United States and China, are “tossing a wet blanket on optimism,” according to Chad Morganlander, portfolio supervisor at Stifel, Nicolaus & & Co in Florham Park, New Jersey. “We are advising investors be underweight equity threat at this moment,” Morganlander said. (Extra reporting by Rodrigo Campos; Editing by Steve Orlofsky and Nick Zieminski).