After three consecutive weeks of gains, stocks were down as investors begin to brace for tighter monetary policy from the Federal Reserve. Last week, the S&P 500 was lower by 1.27%, the Nasdaq dropped 3.86% and the Dow Jones dipped 0.28%. The market drop was mostly due to a changing tone by the Federal Reserve - now, indicating that they will start reducing their balance sheet at a rapid pace as soon as May. Looking forward, this week brings extra excitement as corporate earnings season gets kicked off by the five big banks - JPMorgan, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo.
Economic reports from last week came back mixed: •Vehicle Sales - worse than expectation •Jobless Claims - better than expectation •Consumer Credit - better than expectation In a holiday-shortened week, investors will look for guidance from economic reports like Small Business Optimism, Retail Sales, Consumer Sentiment, Manufacturing and Jobless Claims. Our 'Strength of the Market' view, since last week, remains: Strong