Stock Market Breadth
There is a lot of optimism in markets as investors feel good about the news that China ‘s biggest property company Evergrande will pay interest on its bond. Remember this particular company sent the markets in a major turmoil and investors were thinking that a default at this company could trigger another similar event like the financial crisis.
Looking ahead to today’s UK’s economic figures, we should be well overdue for a significant rebound, despite UK consumers sucking petrol station forecourts dry due to completely unwarranted concerns about fuel shortages. Demand is expected to stay considerable for some time to come, as drivers keep their fuel tanks at more elevated amounts than normal. Expectations for PMI readings are for a 0.3 percent increase, excluding gasoline, and a 0.6 percent increase including fuel, however one can’t help but believe that the fuel figure is a touch cautious.
As for commodities, gold is edging higher today and it is set for a second weekly gain, as a weaker dollar gave some relief from higher US government rates and increasing concerns that central banks will begin to ease economic assistance.
US crude oil is on track for a 0.5 percent gain for the week, remaining close to a seven-year high set earlier in the week. Investors are focused on low crude stockpiles at the key Cushing storage facility in Oklahoma.
The Asian stock market traded mostly higher on the final trading day of the week. The Nikkei index advanced 0.25%. The HSI index increased by 0.16%, while the Shanghai index gained 0.20%. The ASX index increased by 0.03%.
Dow Jones and S&P 500: Market Breadth
The Dow Jones’ market breadth gained further momentum yesterday. 65% of the Dow Jones stocks traded above their 200-day moving average.
The S&P 500 stock breadth also displayed strengthened yesterday. 67% of the shares traded above their 200-day moving average.
Dow Jones Futures Today
The Dow Jones futures saw a gigantic rally this month, and it defies all the odds of a major sell off this week. The Dow’s price is once again near its all-time high and most of the recent move is mainly fuelled due to better than expected earnings results. From a technical price perspective, the price has formed a double top pattern now, and if it fails to break above the previous high, we could certainly see a pull back. It is also important to keep in mind that the 50-day SMA has dropped below the 100-day SMA on the daily time frame, which is a bearish sign. In addition to this the RSI is in the overbought area which also suggests that the price may see a decent pullback especially if the bulls fail to push the price above the previous all-time high.
The near-term support is at 35,057, while the resistance is at 35,510.
Stock Market Rally
The S&P 500 stock index closed higher yesterday; the index increased by 0.30%. The communication services sector led the index lower and 9 out of 11 sectors closed higher yesterday.
The Dow index failed to soar yesterday; the Dow stocks moved the index lower by 0.02%. 17 shares declined, while 13 shares closed higher.
The NASDAQ composite, a tech-savvy index, closed higher by 0.62% yesterday.
S&P 500 Leaders and Laggards: Match Group Inc and IBM
Match Group Inc stock contributed the biggest gain, soaring 10.2%. IBM stock was the largest drag; it fell by 9.56%. The S&P 500 stock index is up 10.74% so far this year.
Dow Jones Leaders and Laggards: Nike and IBM
Nike provided the biggest help for the Dow Jones; it advanced by 2.35%, while IBM was the largest decliner, it fell by 9.56%.