Major averages finished roughly flat on lower volume in a quiet session. While the recent market weakness is due to fears the Trump tax plan may not pass in full, central bank buying of stocks keeps corrections to a minimum as stocks are the new bonds. Stocks such as the FAANG stocks as well as other mega cap names correct minimally as their risk levels have dropped in this QE environment. Central banks print money then use that money to buy these stocks. Dow stocks all make good targets for central bank buying which explains why its worst correction this year is a scant 2.6%.
While we are in a seasonally strong period, keep your stops tight as all it takes is a brief period of mild market weakness to trigger far greater losses in leading stocks. This has been the pattern for much of 2017.
Economic reports this week include the October Producer Price Index on Tuesday, the October Consumer Price Index and October Retail Sales on Wednesday, and October Housing Starts on Friday.
Market Lab Report - Premarket Pulse 11/13/17
|13 Nov 2017 09:02 ET
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