US and European futures are trading higher, as bargain hunting is taking place. The Nasdaq index which has been driving the markets lower for the past number of months and quarters has found some love among investors and traders and the Nasdaq index actually pulled the US markets out of its negative territory to a more positive one. There is no doubt that the entire tech sector is highly oversold and there are some great bargains which traders are finding difficult to resist, especially when stocks like Meta and Netflix are down over 70% from their recent highs.
Oil prices continue to move lower, and this week hasn’t been good for oil traders. Basically, traders and investors are concerned about the looming recession, and they have started to believe that a slowing global economy would have a negative influence on oil demand. In addition to this, we know that next week, OPEC is going to increase its planned production during their meeting. So, by the end of August, we would have all the supply back on the market which the cartel scaled back due to Covid. Although there is no agreement about how much each member will increase oil production after September, there is some general consensus to increase it only gradually. What is the most worrying is the situation that after December this any member of the OPEC member can pump as much oil as they want and that could change the oil supply and demand equation all together.
In terms of economic numbers, we saw the US Manufacturing PMI numbers falling off a cliff yesterday and it become even more clear that economic growth is slowing down, and it is only matter of a time until we see recession readings in front of us. As for today, we have the UK’s Retail sales, German ifo Business Climate and revised US UoM Consumers sentiment numbers on the economic docket. The consensus is that all these numbers are likely to create more pessimism rather than optimism and that may derail the rally that we saw yesterday for the US stocks.
In the crypto world, consolidation is the word that comes to mind when one looks at BTC’s price action. It doesn’t give a great deal of confidence to bulls because bitcoin prices are heavily oversold. So we should see much stronger bids, but in reality, we see very small number of bids that are keeping the price above the 20K and it is highly likely that this support may begin to weakens and that could result in bitcoin’s price falling even further and making a move towards the next critical number of 15K.
The Asian stock market traded higher on the week’s last trading. The Nikkei index gained 1.25%. The HSI index increased by 1.77%, while the KOSPI index soared by 2.35%. The Shanghai index increased by 0.65%.
Dow Jones and S&P 500: Market Breadth
The Dow Jones’ market breadth gained further momentum. 22% of the Dow Jones stocks are trading above their 200-day moving average.
The S&P 500 stock breadth also confirmed some improvement in its momentum. 19% 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 Revised UoM Consumer Sentiment number which will be coming out at 14:00 GMT and the forecast is for 50.2, while the previous number came in at 50.2 as well. In addition to this, we also have the US New Homes Sales data coming in at the same time as well, and the forecast is for 590K, while the previous reading was at 591k.
The Dow Jones futures are trading higher, and the index staged another week of losses. The US 30 index is on track to record its first positive week in nearly three weeks. On the weekly time frame, the price is respecting its 200-day SMA and as long as the price continues to trade above this SMA, there are some hopes for the bulls returning to the market.
As for the RSI, it continues to indicate that prices are oversold on the weekly time frame. Currently, the RSI is trading at 29.
The near-term support is 29,298 while the resistance is 32,146.
Stock Market Rally
The S&P 500 stock index closed higher on Thursday; the index increased by 0.95%. The utility sector led the index lower, and four sectors closed lower yesterday.
The Dow index jumped higher on the second last trading day of the week; the Dow stocks moved the index higher by 0.64%. Twenty-one shares advanced, while nine shares closed lower.
The NASDAQ composite, the tech-heavy index, closed higher by 1.62% yesterday.
S&P 500 Leaders and Laggards: Autodesk and Mosaic co
Autodesk stock contributed the most significant gain, soaring 8.43%. Mosaic Co stock was the most considerable drag; it fell by 9.54%. The S&P 500 stock index is down 20% so far this year.
Dow Jones Leaders and Laggards: Salesforce and Caterpillar
Salesforce provided the most significant help for the Dow Jones; it advanced by 3.34%, while Caterpillar was the largest decliner, it fell by 4.87%.