This year has been a volatile one for stocks. This comes as no surprise. Last week was particularly wild. The SMH(Semiconducter Index)reached new April lows. Without a late bounce Friday the S&P 500 Index would have closed below its 200 day moving average for the second time this week. The Dow 30 Industrials swung nearly 1,300 points between Monday’s low to Thursday’s high. Underneath this nervous action is a very solid earnings backdrop.
From LPL Rersearch: The trampoline finally broke on the S&P 500 Index’s 200-day moving average, which had held firm since the Brexit vote in June 2016. Technology and trade were again the culprits, as they have been through this latest bout of volatility over the past couple of weeks. In response to Monday’s market decline, John Lynch noted, “Amid the recent weakness in stocks, manufacturing sector data showed activity levels near decade highs, while expectations for first quarter S&P 500 earnings growth are for an increase of over 17.0%.” Market fundamentals still look pretty good.
More: As the stock market bottoming process continues, here is what we think investors should focus on: www.LPLResearch.com
As always, great stuff from LPL. Hat tip Ryan Detrick