Market breadth turned decidedly negative during last week’s shortened trading week, as the equal-weight S&P ETF (RSP) lost 1.1% compared to a loss of 0.64% for the S&P 500. As corporate earnings season comes to an end, revenue surprises have started to slow, while bottom-line earnings continue to be relatively strong.
An overabundance of economic reports this week is likely to add to volatility. If Monday’s reports cause a rally, take money off the table — especially from higher-beta stocks. Be patient, and should we be blessed with a 5%-plus selloff in the next week or two, buy. See my column here from last week: 10 Reasons the S&P will trade at 1,600 this year.
This week’s market-moving events
- Monday: Dallas Fed Survey is released at 10:30 a.m.
- Tuesday: S&P Case-Shiller and home prices are released at 9:00 a.m., new-home sales are released at 10:00 a.m., as are consumer-confidence figures and The Richmond Fed Manufacturing Survey results.
- Wednesday: Durable goods at 8:30 a.m. and Pending Home Sales at 10:00 AM
- Thursday: GDP figures will be released (I expect some strong upward revisions) at 8:30, as will Jobless Claims. Chicago PMI figures come out at 9:45 AM
- Friday: March 1st – we will likely wake up to headlines of sequestration. $85 billion in cuts, partially offset by $60 billion in Sandy relief funds. Motor Vehicle sales, Personal Income, PMI Manufacturing, Consumer Sentiment, ISM Manufacturing and Construction Spending figures all are released.