Weekly Market Outlook – March 28, 2016

After five straight weeks of gains, the market finally buckled. It wasn’t a big pullback last week – only 0.6% – but all big trends start out with that first small step. We at least have to acknowledge the possibility that last week’s weakness may be the beginning of something bigger.

And that possibility isn’t just the result of one losing week. The S&P 500 (SPX) (SPY) bumped into a major resistance line, and if the bears were/are going to make a stand anywhere, it’s where the index peaked last week.

We’ll look at it in detail below, as we always do.  First up though, let’s take a quick look at last week’s and this week’s key economic numbers.

Economic Data

There wasn’t a lot on the economic calendar for last week. In fact, the only news of any real interest was February’s existing-home sales and new-home sales. The former was down to a pace of 5.08 million, from January’s pace of 5.47 million. The latter, however, stepped up to a rate of 512,000, from 502,000.  We covered it in more detail on the BigTrends site here, but the gist of the analysis was, real estate demand is reasonably strong, and is perhaps being held back by a limited amount of inventory for sale.

Existing-Home Sales and New-Home Sales Chart

Source: Thomson Reuters

Everything else is on the grid below. Note that durable orders fell 2.8% in February, but that reading merely offset a strong showing in January. It’s not a major concern yet.

Economic Calendar

Source: Briefing.com

This week is clearly going to be much busier, but the only news we’re really interested in is Friday’s jobs report from the Department Of Labor. Economists think we’re going to add a total of 200,000 jobs for March. That’s down more than a little bit from February’s tally of 242,000, and won’t be enough to push the unemployment rate any lower than the current reading of 4.9%.