It was a rocky week for the market last week, but nothing unusual after major indices reached all-time highs. The consolidation of gains after a terrific rally began inconspicuously in late June. In fact, major indices are well above their respective moving averages.

The Dow Jones Industrial Average is well above its exponential 50-day moving average of 26,000. That suggests we could see more wild gyrations and even downside pressure. Everyone has to keep in mind the fundamentals keep getting better.

It will be interesting to see how investors approach the market without any big economic data or consequential earnings releases until Friday.

Key Economic Data

Tuesday: NFIB Small Business Optimism

Friday: Import Export Prices & Consumer Sentiment

Key Earnings Releases

Friday: Citibank, JP Morgan, Wells Fargo, & PNC Bank

3Q18 GDP and Consumer Spending

The Atlanta Fed, recognizing there was a lot of hurricane-related noise in the September Jobs Report, kept their Third Quarter 2018 (3Q18) Gross Domestic Product (GDP) modeling at 4.1%, which would be monumental. 

The month of August saw the biggest spike in credit card use in 2018. It’s clear more consumers are ready to use credit despite while still cognizant of reckless credit debt build up into the Great Recession.  The consumer is poised to spend more, reflecting job security and increased wages.

Ironically, despite the amazing run in the market, we are looking at a ton of oversold names. The question is when they will turn.

Today’s Session

The market is looking to open lower as investors continue to grapple with higher interest rates and a stronger dollar.  In addition, Chinese markets opened after a week off to celebrate Golden Week.

• Shenzhen -3.8%
• Shanghai -3.7%

China’s PBOC loosened bank lending requirements again, this time by 1 percentage point, freeing up $175 billion for commercial banks to lend. 

With the bond market closed in the United States today in observance of Columbus Day, equity investors may be reluctant to force the issue.