Stock Futures Mixed as Inflation Data and Earnings Reports Awaited

Stock futures exhibited mixed trading on Monday as investors awaited key inflation data and second-quarter earnings reports. Dow Jones futures, S&P 500 futures, and Nasdaq futures all experienced slight declines. Despite modest losses last week and surging Treasury yields, the stock market showed resilience. However, Friday's rebound was short-lived, particularly for the Nasdaq, which encountered resistance.

Last week, stocks closed lower due to disappointing jobs data from ADP and the Labor Department. Despite cooling non-farm payroll growth, investors believe that the Federal Reserve will proceed with benchmark interest rate hikes given the steady economic activity.

Several major financial institutions, including BlackRock, JPMorgan Chase, Wells Fargo, and Citi, are set to report their quarterly earnings, signaling the start of the earnings season. JPMorgan Chase, Citigroup, and Wells Fargo are expected to face lower earnings due to sluggish dealmaking and trading revenue, and the lack of investment-banking activity has resulted in significant layoffs. Analysts will also pay attention to the banks' lending outlook and provisions for potential loan losses.

Last month, wage growth remained steady, defying economists' expectations of a slowdown. While workers welcomed the 4.4% gain in average hourly earnings, Wall Street concerns that strong wage growth could contribute to inflationary pressures.

Throughout the week, investors will closely monitor various economic indicators such as consumer and producer price indexes, import and export price indexes, Michigan consumer sentiment and expectations, and speeches from FOMC and Federal Reserve officials.

U.S. Treasury Secretary Janet Yellen concluded her visit to Beijing without major agreements or breakthroughs in strained relations. However, Yellen expressed optimism about the future of the relationship between the two countries.

Over the past three weeks, the market rally has maintained a sideways movement, providing an opportunity for stocks to retreat to crucial support levels or consolidate their positions. While few stocks showed significant buy signals last week, numerous leading stocks from various sectors, including Nvidia, Salesforce, and Flowserve, are showing potential. The technology sector, including chips, software, and megacap stocks, appears strong, as do sectors such as housing, industrials, travel, energy, electric vehicles (EVs), and automakers.

In conclusion, the trend for Dow Jones futures remains uncertain as the outcome of earnings reports and the impact of inflation on monetary policy decisions will play a crucial role in shaping the future direction of the Dow Jones.

Data for Technical Analysis (5H) CFD US30 DJIA

Resistance : 33959.7, 33976.7, 34004.3

Support : 33904.5, 33887.5, 33859.9                           

5H Outlook

Source: Investing.com                  

Buy/Long 1 If the support at the price range 33894.5 - 33904.5 is touched, but the support at 33904.5 cannot be broken, the TP may be set around 33974.9 and the SL around 33889.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 33959.7 - 33969.7, TP may be set around 34005.0 and SL around 33889.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 33959.7 - 33969.7 is touched, but the resistance at 33959.7 cannot be broken, the TP may be set around 33904.5 and the SL around 33974.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 33894.5 - 33904.5, TP may be set around 33860.0 and SL around 33964.0, or up to the risk appetite.       

Pivot Points Jul 11, 2023 01:24AM GMT

Sources: Investing, CNBC