All the major indices are in weak down trends. The Dow, Nasdaq, S&P 500, and Russell 2000 all are in weak down trends giving the Bears a weak advantage over the Bulls going into trading next week.
My prediction for a market crash has occurred and I think markets will go lower before they bottom by the end of October. Stocks fell last week with the S&P 500 ending August with its worst monthly showing in over a year.
The Month of September
September is when leaves and stocks tend to fall;
On Wall Street it?s the worst month of all.
Next week, portfolio managers back after Labor Day have a tendency to clean house making September a bad month for the market. September is the worst month of the year since 1999 with an average loss of -5.9% and I think this September has the potential to be even worse than that. (Source: Stock Trader?s Almanac)
We have Congress coming back from vacation on September 9th to vote on action in Syria. We have the second round of sequestration kicking in on October 1st if a deal isn?t reached in Congress. This second round of sequestration cuts will eliminate about 1.6 million jobs. The U.S. Treasury Secretary has told Congress that the U.S. government will run out of money by mid-October if the debt ceiling is not raised. We have Federal Reserve tapering most likely starting in September or December. We have ObamaCare starting October 1st with major provisions kicking in January 1st, 2014. We have a new Federal Reserve Chairman coming in January 2014. That?s a lot of uncertainty coming our way folks.
A Reuters poll of fund managers showed that investors had increased cash holdings to their highest level in a year, while also reducing exposure to equities and cutting bond positions.
Emerging markets plunged in August. The Indian rupee has fell more than -10% against the U.S. dollar. This is the rupee?s largest monthly fall ever. India is seeking support from other emerging market countries for a coordinated intervention to hold markets up in the wake of Federal Reserve tapering.
Fundamental analysis reports that moved markets last week were: Monday?s Durable Goods Orders, Thursday?s GDP, and Friday?s Personal Income and Outlays.
Manufacturing remains weak with aircraft orders swinging sharply down to drag down the headline number. But other durables orders were weak also. New factory orders for durables in July dropped a huge 7.3 percent after jumping 3.9 percent the month before. Analysts forecast a 4.0 percent drop for July.
Real GDP growth for the second quarter was raised to an annualized rate of 2.5 percent compared to the initial estimate of 1.7 percent and compared to a fourth quarter rise of 0.1 percent. The recent change in how the GDP is calculated has had a huge, positive impact on the GDP number.
The third quarter is having a bumpy start as both personal income and personal spending were near flat. Personal income inched up 0.1 percent in July after gaining 0.3 percent the month before. Analysts expected a 0.2 percent gain. However, the wages & salaries component was notably weak, declining 0.3 percent after an increase of 0.4 percent in June. Consumer spending slowed sharply to a 0.1 percent rise in July but followed a strong 0.6 percent boost the month before. July posted lower than market expectations for a 0.3 percent increase.
Fundamental analysis reports with the greatest probability of moving markets next week are:
Tue ? Sep 03, 2013 = ISM Mfg Index
Wed ? Sep 04, 2013 = International Trade
Fri ? Sep 06, 2013 = Employment Situation
U.S. markets will be closed on Monday, September 2nd, 2013 in celebration of Labor Day.
IF YOU LIKE MY MARKET ANALYSIS, YOU OUGHT TO SEE MY TEACHER JASON BOND! HE?S ON A HOT STREAK RIGHT NOW!
IF YOU LIKE MY MARKET ANALYSIS, YOU OUGHT TO SEE MY TEACHER JASON BOND! HE?S ON A HOT STREAK RIGHT NOW!
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