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Stock Market Breadth

Stock Market Breadth

Stock Market Today  

The US stock futures are trading higher as traders, while the S&P 500 index is on track to post another positive amid heightened geopolitical tensions. The S&P 500 has come a long way away from its recent sell-off, and it is now up nearly 8% from its lows earlier this month. This is despite the fact that most market players believe that the Fed will increase the interest rate aggressively this year. The rally in the stock market doesn’t have wider support as speculators are sitting on the side as there is still no concrete solution to the ongoing war in Ukraine. 

Geopolitical tensions are still very much in focus among investors and traders as they continue to digest more sanctions imposed by the US and its allies yesterday. The fact that President Biden has called for Russia to be ejected from G-20 has made the geopolitical tensions worse. Biden believes that Russia could use the weapon of mass destruction and issued a clear warning to the country against it as such a situation would trigger a direct response from the US and its allies. In addition to this, it has also become clear that more threats for the energy sector are on the way as European leaders are planning a strategy to embargo Russian gas and oil. Basically, a political agreement between President Biden and the EU will clear the way for greater US liquefied natural gas imports to assist the EU in replacing Russian liquefied natural gas imports. In recent years, LNG imports from Russia, the EU’s largest energy source, ranged from 14 billion to 18 billion cubic meters per year.

Forex 

Russian Ruble is very in focus among investors, and this is because in 2022, the economy is anticipated to drop 15%, followed by a 3% decrease in 2023, bringing gross domestic product back to where it was around fifteen years ago. Sharply reduced domestic demand is anticipated to play a critical role, while a drop in imports should counterbalance lower exports, resulting in a modest contribution from net foreign demand. However, if more sanctions, such as trade embargos, are imposed, exports may decrease lower than we currently predict.

According to the Institute of International Finance, Russia is on track to erase 15 years of economic gains by the end of 2023 as a result of its invasion of Ukraine, which caused a slew of sanctions and corporations to flee the country.

Asian Markets 

The Asian stock market traded mostly lower on the final trading day of the week. The Nikkei index declined 0.06%. The Shanghai index dropped by 1.00%, while the HSI index fell by 2.49%. The ASX index increased by 0.26%.

Dow Jones and S&P 500: Market Breadth

The Dow Jones’ market breadth gained a bit more momentum during the last session. 56% of the Dow Jones stocks traded above their 200-day moving average. 

 The S&P 500 stock breadth also confirmed strong momentum. 53% of the shares traded above their 200-day moving average. 

Dow Jones Futures Today

The Dow Jones futures are trading modestly higher today. In terms of economic data, investors will be looking at the US Revised UoM Consumer Sentiment, US Pending Home Sales m/m and Revised UoM Inflation expectations data which will be released later in the day. The forecast for US Revised UoM Consumer Sentiment is 59.7, US Pending Home Sales m/m is 1.0% while for the Revised UoM Inflation expectations is 5.5%.

The Dow Jones futures are trading higher today while the price is stuck in a very tight range. This week we have seen the DJ 30 breaking above the 50-day Simple Moving Average (SMA) on the daily frame which shows that bulls are trying to take the control back. However, the price is still trading below the 100 and 200-day SMA on the same time which shows that bears are still in control of the price. For the current rally to continue, we must see the price moving above all the three important SMAs and staying above them.

As for the RSI, it is rising and moving away from its oversold region of 30. The current reading of the RSS is 56 which shows that the DJ30 price isn’t rich nor cheap. A level of 30 on the RSI is associate with price being cheap and a level of 70 on the RSI is considered is price being too rich.

The near-term support is at 33,800, while the resistance is at 35,25.    

Stock Market Rally

The S&P 500 stock index closed higher yesterday; the index increased by 1.43%. The communication sector led the index lower, and all 11 sectors closed high. 

The Dow index also moved higher on Thursday; the Dow stocks moved the index higher by 1.02%. 27 shares advanced, while 3 shares closed lower. 

The NASDAQ composite, the tech-heavy index, closed higher by 1.93%.

S&P 500 Leaders and Laggards: NVIDA and Epam

NVIDA stock contributed the biggest gain, soaring 9.81%. Epam systems stock was the largest drag; it fell by 6.066%. The S&P 500 stock index is down 5% so far this year.

Dow Jones Leaders and Laggards: Intel and Nike

Intel provided the biggest help for the Dow Jones; it advanced by 6.94%, while Nike inc was the largest decliner, it fell by 0.92%.