The major U.S. cash stock indexes finished marginally higher last week, while the futures market finished mixed. Early in the week, investors focused on the passage of the U.S. tax reform bill then packed it in after the U.S. House and Senate presented the bill to President Trump for his signature.
In the cash market, the benchmark S&P 500 Index settled at 2,683.00, up 0.30%. The blue chip Dow Jones Industrial Average closed at 24,754.00, up 0.40% and the tech-based NASDAQ-100 Index ended the week at 6,960.00, up 0.30%.
In the futures market, March E-mini S&P 500 Index futures settled at 2686.00, up 4.00 or +0.15%. March E-mini Dow Jones Industrial Average futures finished at 24766, up 89 or +0.36% and March E-mini NASDAQ-100 Index futures ended the week at 6483.75, down 14.75 or -0.23%.
For the year, the cash market Dow is up 25.3%. The cash market S&P 500 Index is up 19.9% and the cash market NASDAQ Composite is higher by 29.3%.
Forecast
Volume is expected to continue to come in well below average this week. We also expect to see periodic bouts of volatility due to the thin trading conditions and the absence of major banks and institutions. Normal trading conditions are expected to return shortly after the start of the new year.
Last week’s passage of the largest tax reform Americans have seen in more than three decades is likely to be positive to economic and earnings growth. This should help support stock prices. However, we do believe the markets are a little overextended so we may see a sell-off early next year.
We also think that investors should start preparing for greater market volatility in 2018.
On Wednesday, the Conference Board will release a report on U.S. consumer confidence. On Thursday, the major report will be weekly unemployment claims.
Minor reports include S&P/CS Composite-20 HPI, the Richmond Manufacturing Index, Pending Home Sales, the Goods Trade Balance, Preliminary Wholesale Inventories and Chicago PMI.
This article was originally posted on FX Empire