Market Analysis, Market Commentary, The Early Look

Stimulus is the Word of the Day


Here’s our “early take” on the current state of the markets…

Economic stimulus is the word of the day on this fine Monday morning. After Shinzo Abe’s win in the weekend election, the Japanese Prime Minister promised to take action on the economy, saying he wants to see “bold economic measures” taken in the near-term. In addition, the Bank of England is expected to cut rates tomorrow for the first time since 2009 and Governor Mark Carney faces the U.K. Parliament for what is sure to be a lively discussion.

Put this together with Friday’s Jobs Report, which served to brighten the economic outlook, and you have a recipe for higher stock prices around the world this morning. However, with a very big, very important breakout on the line in the U.S. it would not be surprising to see the bears attempt to make a stand here at some point soon.

On that note, our mean reversion indicators are waving yellow flags at the present time, which is not in and of itself is not a negative, but supports the idea of a near-term pullback. As such, we’ve moved our “new member rating” to hold from buy at the present time.

S&P 500 – Daily

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Current Market Drivers

We strive to identify the driving forces behind the market action on a daily basis. The thinking is that if we can both identify and understand why stocks are doing what they are doing on a short-term basis; we are not likely to be surprised/blind-sided by a big move. Listed below are what we believe to be the driving forces of the current market (Listed in order of importance).

      1. The State of Global Central Bank Policies
      2. The State of U.S. Economic Growth
      3. The Impact of the “BREXIT”
      4. The State of the Stock Market Valuations

Thought For The Day:

“I learned everything I needed to know from John Cougar, John Deere, John 3:16” –Keith Urban

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Here’s wishing you green screens and all the best for a great day,

David D. Moenning
Founder: Heritage Capital Research
Chief Investment Officer: Sowell Management Services

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The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report is for informational purposes only. No part of the material presented in this report is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any investment program.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

David D. Moenning is an investment adviser representative of Sowell Management Services, a registered investment advisor. For a complete description of investment risks, fees and services, review the firm brochure (ADV Part 2) which is available by contacting Sowell. Sowell is not registered as a broker-dealer.

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About the Author

David Moenning is the Chief Investment Officer at Sowell Management Services. Dave began his investment career in 1980 and has been an independent money manager since 1987. Thus, Dave has been live on the firing line and investing for a living for more than 29 years.