The Dow Jones closed at a record high on Friday, which capped off a big rally last week, after the first major reduction of interest rates by the Federal Reserve in four years, a 0.50% reduction. In addition, the S&P 500 climbed above 5,700 for the first time. Last week, all three major averages notched weekly gains - the S&P 500 rose 1.36%, its fifth positive week over the last six weeks, the Dow Jones was higher by 1.62% and the tech-heavy Nasdaq advanced 1.49%. Investors viewed the aggressive Federal Reserve rate cut as positive - seen as a proactive measure to sustain economic momentum, rather than a reactive move to stabilize a weakening economy.
Economic reports from last week came back mixed:
•Manufacturing (New York) - higher than expectation
•Manufacturing (Philadelphia) - lower than expectation
•Retail Sales - higher than expectation
•New Residential Construction - higher than expectation
•Existing Home Sales - lower than expectation
•Jobless Claims - lower than expectation
This week, investors will look for guidance from economic reports like National Economic Activity, Housing, Consumer Confidence & Sentiment, Manufacturing, Personal Income and Jobless Claims.
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