Weekly Investment Outlook: May 1, 2017

weekly update

 

The S&P 500 got a big boost last week from the French election results, Trump tax plan and better-than expected earnings. The key break-out was from the downtrend channel line and now keeps the key support at 2380. The S&P 500 held that support on Friday buoyed by the earnings results from big tech names. The internal breadth was positive with the NYSE Advance/Decline line set a series of new highs during the week. If we break out the previous high of 2400.98 made on the 1st of March this year, the uptrend continues to be intact. The current resistance for S&P 500 remains at 2394.75, followed by another at 2400.98. The major averages broke out of the overhead resistance and I continue to reiterate my bullish bias about which I mentioned in my April 17th newsletter.

 

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Source: Thomson Reuters

 

 

The Trump tax plan was received by open arms by the Wall-Street but given the increase in government deficits and interest rates, achieving congressional support would be a challenge.

Last week we also had the GDP numbers, which rose at 0.7% (at annual rate). The huge inventory subtraction shaved off 0.9 percentage points of the GDP growth and government expenditure shaving off another 0.30 percentage points. The personal income outlay report which came out this week, showed the real personal income increased 2.4% for the month March 2017 (y/y) and the personal consumption expenditure (ex-food and energy) about 1.6%. There is a Fed policy meeting this week, but nobody expects a change. Then there will be April employment report this week, which arrives on Friday.

 

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This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Chintan Shukla, CFA and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. You cannot invest directly in any index and past performance may not be indicative of future results. Investing involves risk and investors may incur a profit or a loss. Securities offered through Raymond James Financial Services, Inc, Member FINRA/SIPC. Goldfarb Financial is not a registered broker/dealer, and is independent of Raymond James Financial Services. Investment Advisory Services are offered through Raymond James Financial Services Advisors, Inc.