US stocks little changed at opening, downbeat economic data weighing

On the last trading day of the week, US stocks opened flat as investors digest weak economic data from the US. All the three major indices – the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite, were nearly unchanged from yesterday’s closing levels. 

The Commerce Department reported the preliminary GDP growth figures for the fourth quarter of 2016, which showed the US economy expanded at a moderate pace of 1.9% annualized rate. The reading marked a sharp drop from 3.5% growth recorded in the previous quarter and was also below consensus estimates of 2.2%. Meanwhile, the US durable goods orders also disappointed and fell in December for the second month in a row, dropping 0.4% as compared a 2.6% growth expected.

Despite of weaker US economic data, markets have not corrected and remained closer to all-time highs touched on Thursday, suggesting that the Trump reflation-led recent up-trend is still intact.

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com notes, "we rejected the trendline we have been following at 2299...reaching 2300......and we are still seeing divergence on the charts...Now we know the break point was 2282/80 and this coupled with the med term fib at 2274 would be a good retracement target...I would expect buyers in at these lower levels and I think they will hold sho0rt positons unless we break below the 2270 area...If we did we look for 2258....Now we know 2300 is a good psychological level..."