The S&P 500 is down for a third consecutive week by 0.5%. In 2016, which is still in green territory, it is up by only 0.2%. Last week, the quarterly earnings reports failed again, with the retail sector leading the decline with a drop of 4.6%, which pushed the whole market down. The market is now 4% under last year's all-time highs and the market multiple is now at 17 - a little higher than the 16 average. In order to justify a multiple of 17, the market must show a positive financial view, however, based on the last quarterly earnings reports, this is not the case, therefore, I expect the market to continue to decline.
Let's take a technical view of the market. When we take a look at the S&P 500 daily, we can see the decline last week and watch this very strong head-and-shoulder formation right at the 2040 area. If this area is going to be broken, and I believe it will, the next station will be 2000 and of course the big test will be in this area. I think we will get there very soon, so hold tight - it is going to be very interesting.
Let's take a look at the last week picks. Firstly, we had Danaher
Let's have two picks for the week. My first week for the week is LyondellBasell Industries