The Major Markets Ended the week mixed. The largest gains in the NASDAQ, while the S&P 500 ended just below last Friday’s close, and the Dow was firmly in the red.
The gains in the NASDAQ were due to the positive returns in the IT sector. Meanwhile, most other S&P sectors ended the week down.
Despite numerous economic reports, a Fed meeting, and over 1150 earnings releases, the S&P 1500 index ended almost completely unchanged on the week. This index is a combination of the S&P 500, S&P MidCap 400 and the SmallCap 600. It covers approximately 90% of the U.S. market capitalization so it gives a fairly good view of the total U.S. Equity Market. The 1500 end the week just below last week’s all-time closing high as it sits with a positive 6.85% return YTD.
As we dissect the U.S. Equity Market further, we see that the value segments of the market have so far managed to outperform the growth segments in each market capitalization, with the MidCap Value leading the way.
For the S&P 500 in particular, these last two weeks have been one of the tightest ranges for the market in some time. The S&P hasn’t exceeded a half-percent change on a closing basis, positive or negative, for 11 consecutive days. And it hasn’t exceeded a three-quarter percent daily closing change for 14 consecutive days. This is the longest, narrow streak in 16 months.
This week’s intraday chart looked like a saw as the narrow trading range kept bringing the market back towards unchanged on the week as we approached Friday’s GDP Release.
Ultimately, GDP came in far below the 2.6% estimates with a reading of 1.2%. Furthermore, 1st Q GDP was lowered from 1.1% to 0.8%. And adding insult to injury, the second quarter 2015 numbers were also dramatically cut down from 3.9% to 2.6%.
This shows that when the Fed was gearing up to increase rates, the US economy was actually beginning to slow.
With this week being the first of the new month, market participants will be looking to Friday’s Employment situation report to bring in some confidence as we approach Summer’s halfway point this Saturday.