There is a lot of optimism everywhere on the final trading day of the week. For instance, if we look at the cryptocurrencies, it is almost certain that the SEC is going to allow the first Bitcoin ETF which will be a watershed moment for the crypto community as they have been waiting for this since 2018. The reflection of this optimism can also be seen by looking at the Bitcoin price, which is only 7% away from its all-time high.
We are also seeing serious momentum in Ethereum as traders know that the next cryptocurrency which is going to see a significant increase in value will be Ethereum as institutions are serious about ETH.
As for the equity markets, yesterday labour data confirmed that US Weekly Jobless Claims number are at their best level since the start of the pandemic as the data printed the lowest Jobless Claims since March 2020.
In addition to this, market players are ready for the Fed to tighten the monetary policy as they believe if the Fed doesn’t start the tapering process now, it will only hurt the US economy as inflation is going to remain anchored until at least mid-2022.
On top of this, we also have the US earnings seasons unfolding which has set a very positive tone so far in the market. We have seen really healthy numbers out of the US banking sector this week. The remaining Wall Street giants will report their earnings today, including Goldman Sachs and Charles Schwab.
Overall, it is safe to say that the US equity market is fully in a risk-on mode and traders aren’t afraid in backing riskier assets.
The Asian stock market traded mostly higher on the final trading day of the week. The Nikkei index advanced 1.47%. The HSI index increased by 0.89%, while the Shanghai index gained 0.25%. The ASX index dropped by 0.75%.
Dow Jones and S&P 500: Market Breadth
The Dow Jones’ market breadth gained further momentum yesterday. 62% of the Dow Jones stocks traded above their 200-day moving average.
The S&P 500 stock breadth also displayed strengthened yesterday. 65% 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, investors will be looking at the US Retail Sales m/m reading which is due at 13:30 PM BST. In addition to this, we also have the US Empire State Manufacturing Index, and the expectations are that we will see a reading of 24.9 while the previous reading was at 34.3. As for the US Retail Sales number, traders are hoping to see the data printing the number -0.2%, while the precious reading came in at 0.7%.
The Dow Jones futures saw a gigantic move yesterday and the move made the Dow cross above the 50, 100 and 200-day simple moving averages on the daily time frame. This means that the bulls are back on the driving seat, and we are likely to see higher highs and higher lows for the Dow Jones if the momentum continues like this. We have also saw the RSI pulling away from the oversold zone yesterday– a significant move happened towards the overbought area. The current reading of the RSI on the daily time frame is 61 which means that the RSI isn’t too far from 70 which is classified as an oversold area.
The near term support is at 34,010, while the resistance is at 35,510.
Stock Market Rally
The S&P 500 stock index closed higher yesterday; the index increased by 1.71%. The material sector led the index lower and 11 out of 11 sectors closed higher.
The Dow index also soared yesterday; the Dow stocks moved the index higher by 1.56%. 2 shares declined, while 28 shares closed higher.
The NASDAQ composite, a tech-savvy index, closed higher by 1.73% yesterday.
S&P 500 Leaders and Laggards: Walgreen Boots and Bancorp
Walgreens Boots stock contributed the biggest gain, soaring 7.42%. US Bancorp stock was the largest drag; it fell by 2.24%. The S&P 500 stock index is up 10.74% so far this year.
Dow Jones Leaders and Laggards: Walgreen Boots and Boeing
Walgreen Boots provided the biggest help for the Dow Jones; it advanced by 7.42%, while Boeing was the largest decliner, it fell by 1.95%.