Technicals still lean bullish. U.S. stocks are slightly higher this morning amid trade headlines, but the S&P 500 Index is still poised for its first weekly loss since early October. We have yet to see a concerning breakdown in technicals, as it looks like stocks are simply consolidating strong gains from the past several weeks. However, we could see more volatility as investors digest a continuing batch of trade headlines in a quiet period for economic data. On pullbacks, we see strong technical support at 3,030 (2% below the November 21 close) and 2,950 (5% below the November 21 close).
Signs of domestic stabilization. The Conference Board’s Leading Economic Index (LEI) rose 0.3% year over year in October, tying June 2016 for the slowest growth of the expansion. Even though the gauge barely eked out a year-over-year gain last month, we see signs of stabilizing growth in domestic leading indicators. We’ll dig into the October LEI data more today on the LPL Research blog.
Signs of global stabilization. Markit’s Germany Purchasing Managers’ Index (PMI) jumped the most in two years this month, according to preliminary November data. Business confidence increased, according to the Markit report, as expectations for future output climbed. Markit’s Eurozone PMI also picked up substantially, thanks to improving sentiment. While both PMIs are still squarely contractionary territory (below 50), global manufacturing continues to show signs of stabilization.
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