On Thursday Dec 29 2016, volume was poor and markets tried a short early morning rally and then faded into the rest of the day. Action was uninspiring but losses still remain small.
Overall the markets are still within easy striking distance of their all-time highs, but we won’t see them push to try to take those highs on the final trading day of the year.
Thursday saw the dollar weaken and gold move higher. The Weekly Initial Unemployment Insurance Claims fell to 265,000 as the holiday employment opportunities took a slice out of those needing unemployment benefits. This though could be a short-lived dip as the holiday employment period comes to a close next week.
This is now 95 straight weeks of the Weekly Initial Unemployment Insurance Claims being under 300,000. This is the longest such period since 1970.
Meanwhile the November trade figures came in and showed a trade deficit increase of 5.5%, far larger than forecasts. This will impact negatively against GDP numbers for the final quarter of 2016 when they are released. Wholesale inventories nudged higher by 0.9% in November which is 1.2% higher than November 2015 and again is a concern as it shows economic growth remains uneven.
S&P Index Close
The S&P index ended the day almost unchanged with a slight loss of 0.66 to close at 2249.26 and well within range of holding 2250.
Dow Jones Index
The Dow Jones ended the day down 13.90 to close at 19,819.78.
NASDAQ Index Close
The NASDAQ closed down 6.47 to close at 5,432.09.
Stock Market Outlook for Tomorrow – Dec 30 2016
Historically the final trading day of the year has been poor over the last 15 years. Much of this is due to low holiday volumes. As well many investors are adjusting portfolios during the final week and the final day as they prepare for the end of the old year and the start of a new year.
There are no real changes in the stock market technical indicators for today so there is no technical report.
MACD continues to point to lower prices ahead but the Relative Strength Index (RSI) does not agree and is continuing to support sideways action for the present time.
Friday should start with another attempt at a pop and then a fade once again as volume should dry up, especially as the bond markets close early.
I wouldn’t expect much action on Friday but also not a lot of downside movement either. Overall the outlook is unchanged from Thursday’s stock market outlook, with a sideways day expected on Friday and the bias tilted slightly to the downside.
Next week though should see a bounce back for stocks at least at the outset. Happy New Year To All!
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