US stock futures continue to trade higher as investors are feeling a lot more optimistic about the future growth of the US economy. The fact that the White House has finally struck a deal on the infrastructure bill with a bipartisan group is highly positive for the US economy. Another one trillion dollars in terms of infrastructure is going to boost the overall US economy and it will also improve the labour market as well. Infrastructure spending is perhaps the best form of stimulus spending as it doesn’t only boost the economy in the short term but improves the infrastructure as well, which helps the prospects of future growth.
The Asian stock market traded mostly higher on Friday. The Nikkei index soared 0.68%. The HSI index increased by 1.14%, while the Shanghai index went up by 0.79%. The ASX index gained by 0.33%.
Dow Jones and S&P 500: Market Breadth
The Dow Jones’ market breadth gained further momentum yesterday. 87% of the Dow Jones stocks traded above their 200-day moving average.
The S&P 500 stock breadth also confirmed more strength yesterday. 88% of the shares traded above their 200-day moving average.
Dow Jones Futures Today
The Dow Jones futures are trading higher today. In terms of economic data, it is all about the upcoming US inflation number. The Fed has warned the markets that inflation may continue to soar, and they aren’t likely to address this because this is only transitory. However, if the upcoming number surges, and outpaces the forecast, we could see panic in the market. The forecast is for 0.6%, while the previous number was at 0.7%
The Dow Jones futures are trading higher on the final trading day of the week, and the Dow is set to erase all of the losses that it suffered last week. The fact is that last week’s sell off was too intense and it made the Dow too cheap. For instance, the sell-off pushed the Dow futures below their 100-day SMA on the daily time frame and traders took advantage of that situation to bagging some bargains. Currently, the Dow Jones is in battle with the 50-day SMA on the daily time frame and if we see the price moving above the 50-day SMA that will be a further confirmation that this market may continue to move higher. It is important to note that the Dow is the weakest index among the other two indices—the S&P 500 and the Nasdaq.
As for the RSI, it continues to improve and it shows that the bulls are in control of the price, and the momentum is likely to continue as the RSI is not close to its oversold zone.
The near-term support is at 33,747, while the resistance is at 35,007.
Stock Market Rally
The S&P 500 stock index closed higher yesterday; the index increased by 0.58%. The banking sector led the index higher and 8 out of 11 sectors closed lower.
The Dow index also increased yesterday; the Dow stocks moved the index higher by 0.95%. 28 shares advanced, while 2 shares closed lower.
The NASDAQ composite, a tech-savvy index, closed higher yesterday and gained 0.69% yesterday.
S&P 500 Leaders and Laggards: Eli Lilly and Biogen
Eli Lilly stock contributed the biggest gain, soaring 7.31%. Biogen Inc stock was the largest drag; it fell by 6.15%. The S&P 500 stock index is up 1.74% so far this year.
Dow Jones Leaders and Laggards: Boing and Apple
Boeing provided the biggest help for the Dow Jones; it advanced by 2.8%, while Apple was the largest decliner, it fell by 0.21%.