Markets continued their downward spiral as a government shutdown is looming late Friday night. With no good news in the headlines, and markets still digesting the latest Fed move, the Nasdaq was the first to succumb to selling pressure. The DJIA and S&P 500 followed the tech index down in the afternoon. December, usually one of the better months for the market, has been brutal for all three major indices. The DJIA suffered its worst one week loss in 10 years, finishing down over 400 points and 1.81% on Friday. The S&P 500 was down 2.06. The Nasdaq, which has taken the brunt of the selling and is now in bear territory, down over 20% from its highs, closed down 2.99% and over 8% on the year, to mark the winter solstice.

It’s difficult to see the light at the end of the tunnel as investors head into the final full week of 2018. With the U.S. Justice Department announcing actions against Chinese nationals earlier in the week, trade issues between the two countries appear no closer to resolution. Chairman Powell appeared to pay little attention to recent market action in his statement earlier in the week. And a showdown in Washington may have the government partially shuttered by the weekend. With the mountain of negativity weighing heavy on the markets overall, it appears clear this is a stock picker’s market as we head into 2019.    

Monday analysts will examine the Chicago Fed National Activity Index. The Index is comprised of 85 different national economic indicators and has been trending higher since late 2016. The Index is expected to come in at .24, below the three month average of .31. No economic numbers will be released, and financial markets are closed, on the Christmas holiday Tuesday.

No major earnings announcements are scheduled for next week, with most Wall Street traders taking the usual week off between the Christmas holiday and New Years day.

Wednesday Redbook retail data, as well as the Corelogic Case-Shiller Home Price Index numbers will be released. The single-family home index is expected to show a price increase of .3% month-over-month and 5.1% year-over-year. The index has been trending lower since May. Also released Wednesday is the Richmond Fed Manufacturing Index and the State Street Investor Confidence Index. The Investor Confidence Index began trending lower in April and broke through levels not seen since 2016 in September. The index is based on the amount of equities investors hold in their accounts, with more equity holdings equaling a higher index reading. The index is broad based and measures the level of equity holdings in 45 countries. Thursday we’ll examine jobless claims, FHFA home prices, new home sales, and consumer confidence. On the final Friday of December, international trade, retail inventories, wholesale inventories, Chicago PMI, and pending home sales numbers will all be released. Pending home sales dropped 2.6% month-over-month in the October release, and with the Fed continuing to hike little upside is expected for November.

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