Dow Jones industrial average and S&P 500 futures are trading lower as traders continue to assess corporate earnings. Netflix NFLX +0.8% reported its earnings report yesterday, and the stock failed to impress Wall Street. Investors are also a little hesitant in buying shares because we also had a mixed bag of economic numbers this week.
The economic data released yesterday confirmed that the U.S. economy has stalled. The July U.S. retail sales m/m number came in at 7.3% growth against the previous reading of 18.2%. Last month, in June, we experienced a massive improvement in this number, and that was because Americans were optimistic about the re-opening of the economy.
Yesterday’s U.S. jobless claims data didn’t have much good news for the U.S. economy. The U.S. initial jobless claims came in at 1.3 million against the forecast of 1.25 million. There was some silver lining in the continuing jobless claims data as it was better than the estimates and the previous reading. Actual came in at 18.06 million, forecast 17.338 million, and previous 18.06 million.
Dow Jones Index and U.S. Consumer Sentiment
The DJIA futures are likely to get some help from the upcoming U.S. consumer sentiment data. The expectations are for 79 against the previous reading of 78.1. If we get a better number than the forecast, we are likely to see investors buy more stocks. However, if the number fails to impress Wall Street, speculations will grow for more stimulus help.
Dow Index And S&P 500 Index: Market Breadth
The stock market’s breadth confirms that the bulls are in firm control of the price. 50% of the S&P 500 stocks have traded above their 200-day moving average, a 1% change from the day before.
The Dow Jones stocks continue to maintain its bull momentum. 50% of the stocks are trading above their 200-day moving average.
Dow Jones And S&P 500 Futures Today
The Dow Jones futures are trading almost flat. Traders are still convinced that the Dow Jones is likely to close the week in positive territory.
The Dow Jones futures price is trading above the 50 and 100-week moving average. This week, the Dow stocks have been able to win this battle. The big question is if we can close the week above these critical moving averages? If the Dow Jones index closes the week above the 50 and 100 -week moving averages, it will be very bullish for the stock market rally.
The S&P 500 index, a better representation of the U.S. stock market, shows no signs of weakness. The S&P 500 stocks have already made higher high as compared to the last week on a weekly time frame. This confirms that traders are fully committed to buying stocks and want to push the stock market higher. The S&P 500 index is trading above the 50, 100, and 200-week moving average, and it is set to close the week in positive territory.
Stock Market Rally
The S&P 500 index is only a 0.47% away to erase all of its YTD losses today. The index can become positive for the year if the corporate earnings and economic data provide enough support. So far, 80% of U.S. companies have beat the market expectations in terms of earnings. It is likely that this trend may continue next week when big tech names start to announce their earnings.
The S&P 500 index closed the day in negative territory yesterday and fell 0.34%. Information technology led the losses for the S&P 500 index; it fell 1.22%. The utility sector jumped higher by 1.32%. Overall, it was a draw among the S&P 500 sectors, six fell, and six gained.
The NASDAQ composite, a tech-savvy index, also dropped 0.70% yesterday.