Investors started the week off on alert as a cool-off period may have begun. A combination of trillions in stimulus, build-up of investor savings and expectations of high corporate profits have stocks overheating. Now, investors are starting to feel that the stock market may have risen too high and too fast. This week, President-elect Biden will formally announce plans for his economic stimulus roll-out and investors may not truly be worried unless, during the new administration, signs of delays start to appear with the new stimulus measures.
Looking at the economics from last week, reports came back mostly positive:
•Vehicle Sales - better than expectation
•Manufacturing - better than expectation
•Consumer Credit - better than expectation
•Employment Situation/Report - worse than expectation
•Jobless Claims - worse than expectation
This week, investors will look for guidance from reports like Small Business Optimism, Jobless Claims, Manufacturing and Consumer Sentiment.
Surprisingly, financial markets have largely looked past last week's attack on the Capitol, staying focused on Joe Biden's election confirmation and the likelihood of another big stimulus package. With that said, our price-average and momentum research is showing fully strong indicators.
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