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Stock Futures Trade Higher Ahead of The ADP Data

Stock Futures Trade Higher Ahead of The ADP Data

European and US stock futures are trading higher as traders are picking up the momentum where they left off yesterday. The focus for investors and traders will be on the upcoming US ADP numbers which are going to set the tone for the upcoming US NFP due on Friday. In addition to this, we are also going to get more information about the US economy from the US ISM services number which are also slated to be released later today.

Investors should be aware that general market sentiment was down in Monday’s session after the Institute for Supply Management reported that the purchasing managers’ index fell to 59.5 in July (ISM). The US factory orders data for June, on the other hand, bolstered the bullish rally in yesterday’s session. According to data, new product orders improved by 1.5% month over month, outperforming the projected 1% growth.

Yesterday, we saw the US stock market entering in the recovery mode, which sent the S&P 500 to a new high during the regular session. Following Monday’s drop in equity markets, the three major indices rose as investors weighed the strength of corporate earnings and strong economic data against a surge in coronavirus cases from the Delta variant and another round of regulatory crackdowns by China.

Stock Market Today

Moving forward, the strength of corporate earnings is likely to remain the driving force supporting equity markets in the coming months. Lyft, a car sharing company, posted a 125% growth in revenue on a year on year basis and Caesars Entertainment achieved revenue of $2.5 billion. However, investors should understand that the strong percentage growth in earnings is amplified by the rock bottom figures of last year amidst the pandemic. Having said that, the published results are still remarkable even when compared with pre-pandemic reports.

Another factor that stock traders should keep an eye on is the rise in Covid cases around the world. The Delta variant is proving to be more of a threat, as evidenced by the rise in cases in the United States. The seven-day rolling average of new Covid cases has risen to 85,000, up from nearly 13,000 just a month ago. However, thanks to a successful vaccination campaign, a whopping 165.1 million Americans have already been fully immunised. As a result, the resumption of lockdowns appears highly unlikely.

To get clues on how the economy is recovering, investors should dissect today’s ADP non-farm employment change and the ISM services PMI set to be released today.

Asian Markets

The strict regulatory controls imposed by China’s regulatory authorities have made potential investors and businesses wary of the country’s economic future. Beijing’s continued campaign against big tech has started to take a toll on the operational performance of companies, as can be seen in Alibaba’s case. Alibaba missed its revenue forecasts for the first time in more than two years. The change in the regulatory landscape put a curb on the growth of the company’s major divisions, from ecommerce to cloud. This shows that the clampdowns by Beijing are restricting companies from undertaking expansion projects.

Profit of Ant Financials, Jack Ma’s fintech giant, saw a 37% dip in the quarter ending March. Similarly, the stock price of Tencent also dropped nearly 11% after the media in China criticised the online gaming industry as addictive as drugs for children. Investors absorbed this news as a signal that the next regulatory target could be the gaming industry in China.

As of 10:43 p.m. EST, the Nikkei was down 0.07% while the Shanghai Composite Index rose by 0.65%. The ASX 200 index jumped 0.14% and Seoul’s Kospi rose 0.82%. The Hang Seng index in Hong Kong hopped 1.19%.

Cryptocurrencies

Bitcoin, the benchmark for cryptocurrencies, has been declining during the past few days after a strong rebound pushing the digital coin up to the $41,000 mark. It is currently trading at about $38,131. The recent decline in prices is most likely part of a regular pullback from a strong gain seen in recent weeks. Earlier, strong comments by Elon Musk and Cathie Wood, of Ark Investment, supported the digital asset’s recovery.

Despite the massive volatility that can be seen in the crypto markets, the assets historically have formed recurring patterns that investors use to predict the potential price action of cryptocurrencies. The huge boost in prices from 2020 to April 2029 emerged after a multi-month bottoming formation. From then on, Bitcoin prices skyrocketed until momentum faded away.

Crypto enthusiasts should understand that for another massive rally to occur, a similar chain of events should likely happen again and the consolidation of prices since May is again moving towards a possible bottoming formation. This scenario could become a potential reality if Bitcoin can post a higher low in August compared to its low point in July.

Gold

The price of gold declined yesterday as investors are anticipating the jobs data to be released later this week. The outcome could become a significant factor that the Federal Reserve could use to decide the timeline for the tapering of its asset purchase programme. The non-farm payroll data is forecasted to show a boost of 880,000 in July after surging by 850,000 in June. As per Christopher Waller, the Governor of the Federal Reserve, the central bank could start cutting its bond purchases as early as October.

Oil

It is all about the US Crude oil inventory data today when it comes to the oil prices. Remember, last week we saw a major drawdown in oil inventory data which helped the oil prices to move higher. The reality is that demand is continuing to improve in the US and across the world as economic activity is moving closer to its normal level.

European and US stock futures are trading higher as traders are picking up the momentum where they left off yesterday. The focus for investors and traders will be on the upcoming US ADP numbers which are going to set the tone for the upcoming US NFP due on Friday. In addition to this, we are also going to get more information about the US economy from the US ISM services number which are also slated to be released later today.

Investors should be aware that general market sentiment was down in Monday’s session after the Institute for Supply Management reported that the purchasing managers’ index fell to 59.5 in July (ISM). The US factory orders data for June, on the other hand, bolstered the bullish rally in yesterday’s session. According to data, new product orders improved by 1.5% month over month, outperforming the projected 1% growth.

Yesterday, we saw the US stock market entering in the recovery mood which sent the S&P 500 to a new high during the regular session. Following Monday’s drop in equity markets, the three major indices rose as investors weighed the strength of corporate earnings and strong economic data against a surge in coronavirus cases from the Delta variant and another round of regulatory crackdowns by China.

Stock Market Today

Moving forward, the strength of corporate earnings is likely to remain the driving force supporting equity markets in the coming months. Lyft, a car sharing company, posted a 125% growth in revenue on a year on year basis and Caesars Entertainment achieved a revenue of $2.5 billion. However, investors should understand that the strong percentage growth in earnings is amplified by the rock bottom figures of last year amidst the pandemic. Having said that, the published results are still remarkable when even compared with pre-pandemic reports.

Another factor that stock traders should keep an eye on is the rise in covid cases around the world. The Delta variant is proving to be more of a threat, as evidenced by the rise in cases in the United States. The seven-day rolling average of new covid cases has risen to 85,000, up from nearly 13,000 just a month ago. However, thanks to a successful vaccination campaign, a whopping 165.1 million Americans have already been fully immunised. As a result, the resumption of lockdowns appears highly unlikely.

To get clues on how the economy is recovering, investors should dissect today’s ADP non-farm employment change and the ISM services PMI set to be released today.

Asian Markets

The strict regulatory controls imposed by China’s regulatory authorities have made potential investors and businesses wary of the country’s economic future. Beijing’s continued campaign against big tech has started to take a toll on the operational performance of companies, as can be seen in Alibaba’s case. Alibaba missed its revenue forecasts for the first time in more than two years. The change in the regulatory landscape put a curb on the growth of the company’s major divisions, from ecommerce to cloud. This shows that the clampdowns by Beijing are restricting companies from undertaking expansion projects.

Profit of Ant Financials, Jack Ma’s fintech giant, saw a 37% dip in the quarter ending March. Similarly, the stock price of Tencent also dropped nearly 11% after the media in China criticized the online gaming industry as addictive as drugs for children. Investors absorbed this news as a signal that the next regulatory target could be the gaming industry in China.

As of 10:43 p.m. EST, the Nikkei was down 0.07% while the Shanghai Composite Index rose by 0.65%. The ASX 200 index jumped 0.14% and Seoul’s Kospi rose 0.82%. The Hang Seng index in Hong Kong hopped 1.19%.

Cryptocurrencies

Bitcoin, the benchmark for crypto currencies, has been declining during the past few days after a strong rebound pushing the digital coin up to the $41,000 mark. It is currently trading at about $38,131 . The recent decline in prices is most likely part of a regular pullback from a strong gain seen in recent weeks. Earlier, strong comments by Elon Musk and Cathie Wood, of Ark Investment, supported the digital asset’s recovery.

Despite the massive volatility that can be seen in the crypto markets, the assets historically have formed recurring patterns that investors use to predict the potential price action of cryptocurrencies. The huge boost in prices from 2020 to April 2029 emerged after a multi-month bottoming formation. From then on, Bitcoin prices skyrocketed until momentum faded away.

Crypto enthusiasts should understand that for another massive rally to occur, a similar chain of events should likely happen again and the consolidation of prices since May is again moving towards a possible bottoming formation. This scenario could become a potential reality if Bitcoin can post a higher low in August compared to its low point in July.

Gold

The price of gold declined yesterday as investors anticipate the jobs data to be released later this week. The outcome could become a significant factor that the Federal Reserve could use to decide the timeline for the tapering of its asset purchase program. The non-farm payroll data is forecasted to show a boost of 880,000 in July after surging by 850,000 in June. As per Christopher Waller, the Governor of the Federal Reserve, the central bank could start cutting its bond purchases as early as October.

Oil

It is all about the US Crude oil inventory data today when it comes to the oil prices. Remember, last week we saw a major drawdown in oil inventory data which helped the oil prices to move higher. The reality is that demand is continuing to improve in the US and across the world as economic activity is moving closer to its normal level.