The Day Ahead, Wednesday November 21st

First and foremost, the Dwyer Strategy Team would like to wish you a very safe and Happy Thanksgiving.  We are very grateful for your interest in our site, and will continue to do our best in providing great content.

The retesting process continued on Tuesday with the S&P 500 closing at nearly the same level as the October 29^th lows. As we stated a few weeks ago, we fully expected this retest and are now looking for signs it is coming to an end. We continue to believe that our core thesis remains in-tact and that the recent decline is an investor sentiment trade rather than one solely based on fundamentals. Due out on Wednesday are three major economic data releases, and we believe that weaker data is more market friendly because it increases the probability of fewer Fed rate hikes in 2019.

What matters:

Durable Goods Orders Release – At 8:30 A.M. EDT, Durable Goods Orders for the month of October are due out. Current expectations are for a release of -2.5%, compared to a rise of +0.7% in September. When excluding the volatile transportation, Durable Goods are expected to rise by +0.4% month-over-month in October, compared to no change in September.

Leading Economic Index Release – At 10:00 A.M. EDT, the Leading Economic Indicator Index for the month of October is due out. Current expectations are for a month-over-month rise of +0.1%, compared to a rise of +0.5% in September. The LEI has remained positive for most of this economic cycle, another strong indicator that the economy continues to expand.

University of Michigan Consumer Sentiment Release – Also due out at 10:00 A.M. EDT is the final release of the University of Michigan Consumer Sentiment Index for the month of October. Current expectations expect no change from the first release of the number, which was 98.3.

Past performance is not a guarantee of future results. All market data points and expectations are from Bloomberg as of 11/20/2018, and should not be relied upon as current thereafter.