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Bob Carey
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  Stocks Ended Sept. 9, 2016
Posted Under: Weekly Market Commentary

 
Stocks hovered near record-highs during the holiday-shortened week before tumbling on Friday amid concerns about less accommodative central bank policy. Boston Fed President Eric Rosengarten commented on Friday that waiting too long to increase rates threatens to overheat the U.S. economy and poses risks to financial stability. In addition to hawkish comments from a Fed President, European Central Bank President Mario Draghi decided to leave the ECB's current stimulus plan unchanged, disappointing many investors. Defensive stocks, the darlings of the first half of 2016, saw share prices fall further than the S&P 500 on higher rate concerns as many defensive names boast high dividend yields. In addition, defensive stock valuations appear stretched compared to the broader market and flows are starting to reverse away from some of the most popular funds. In stock news, HD Supply Holdings Inc. fell following disappointing earnings and a guidance cut due to execution issues, further supply chain investment and end market weakness. Western Digital Corp. raised guidance for the first quarter on improving product mix from the acquisition of SanDisk Corp. Shares of Tractor Supply Company tumbled after lowering full-year guidance, citing headwinds for the energy and agriculture end markets. Looking ahead to next week, retail sales and industrial production will be key economic data points. Looking longer term, Friday's sell-off could be the start of increased volatility as the market has lacked large swings in the recent past. Quality companies trading at reasonable valuations could be attractive if volatility persists.
Posted on Monday, September 12, 2016 @ 8:04 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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