Stock futures continue to trade flat to lower, as investors are still not sure how the Fed will respond during their meeting which is scheduled for the 15th and 16th June. Last week, it became clear that the US labour market isn’t that strong, but this week we are going to get more information on inflation data and any upside surprise on the inflation number is highly likely to increase the bets that the Fed may begin to prepare the market for their hawkish monetary policy.
Over in the UK, it is highly likely that we may see some higher volatility returning for the Sterling and for the FTSE 100 index. This is mainly because the UK is likely to delay its plan to further ease off the coronavirus related restrictions.
The Asian stock market traded mostly lower on Tuesday. The Nikkei index declined 0.09%. The HSI index decreased by 0.52%, while the Shanghai index fell by 0.35%. The ASX index gained by 0.15%.
Dow Jones and S&P 500: Market Breadth
The Dow Jones’ market breadth lost further momentum yesterday. 87% of the Dow Jones stocks traded above their 200-day moving average.
The S&P 500 stock breadth also confirmed decline in momentum yesterday. 90% of the shares traded above their 200-day moving average.
Dow Jones Futures Today
The Dow Jones futures are trading lower today. In terms of economic data, investors will be looking at JOLTS Job Opening numbers and the forecast is for 8.18 M against the previous reading of 8.12M. We also have the NFIB small Business Index data as well and the forecast is for 101.2 while the previous number came in at 99.8.
The Dow Jones futures has started to lose momentum and it began the week o the back foot. Having said that, the Dow futures are still trading above the 50-day SMA on the daily time frame. However, the Dow recently tested the 50-day SMA and if the price tests the 50-day SMA again, it is highly likely that the Dow Jones futures could fall below the 50-day SMA. Over all, the bulls are still in control of the price, which is trading above the 50, 100 and 200-day SMA on the daily time frame.
As for the RSI, there are no signs of negative divergence between the RSI and the Dow Jones. However, the RSI is trading near the 70-mark and this means that we could see more sell off for the Dow Jones.
The near term support is at 33,186, while the resistance is at 34,998.
Stock Market Rally
The S&P 500 stock index closed lower yesterday; the index declined by 0.08%. The banking sector led the index higher and 7 out of 11 sectors closed lower.
The Dow index also declined yesterday; the Dow stocks moved the index lower by 0.36%. 10 shares advanced, while 20 shares closed lower.
The NASDAQ composite, a tech-savvy index, closed higher yesterday and gained 0.49% yesterday.
S&P 500 Leaders and Laggards: Biogen and Organon
Biogen Inc stock contributed the biggest gain, soaring 38.34%. Organon & Co stock was the largest drag; it fell by 7.99%. The S&P 500 stock index is up 1.74% so far this year.
Dow Jones Leaders and Laggards: Microsoft and Merck
Microsoft provided the biggest help for the Dow Jones; it advanced by 1.20%, while Merck and Co was the largest decliner, it fell by 1.768%.