Nasdaq soars

GDP results for the second quarter of 2017 reflect recovery from the soft patch in 2016.

Nominal GDP compared to Nonfarm Payroll * Average Weekly Hours * Average Hourly Rate

Source: St Louis Fed, BLS & BEA

Nominal GDP for Q2 improved to 3.71%, measured annually. This closely follows our intial estimate calculated from Nonfarm Payroll * Average Weekly Hours * Average Hourly Rate.

Real GDP, after adjustment for inflation, also improved, to a 2.1% annual rate.

Real GDP compared to Nonfarm Payroll * Average Weekly Hours

Source: St Louis Fed, BLS & BEA

Bellwether transport stock Fedex is undergoing a correction at present but selling pressure appears moderate. Respect of medium-term support at 200 is likely and would confirm the primary up-trend (and rising economic activity).

Fedex

The Nasdaq 100 gained more than 20% year-to-date, from 4863 at end of December 2016 to 5908 on July 28th. Growth since 2009 has been consistent at around 20% a year but now appears to be accelerating. To my mind that warns sentiment may be running ahead of earnings, increasing the risk of a major adjustment. But there is no indication of this at present.

Nasdaq 100

The S&P 500 continues its advance towards 2500 at a more modest pace. Bearish divergence on Twiggs Money Flow warns of selling pressure but this seems to be secondary in nature, with the indicator holding well above zero.

S&P 500

Target 2400 + ( 2400 – 2300 ) = 2500

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