US Stock Market Key Points:
- The S&P 500, Dow Jones and Nasdaq 100 continued to push larger as we speak, setting contemporary three-month-highs within the early a part of the session. S&P500 ultimately discovered sellers on the 200 Day Moving Average.
- Walmart and HomeDepot beat expectations. Bed Bath and Beyond will get one other enhance by Reddit merchants.
- All eyes are on the FOMC minutes from July’s assembly, which will likely be launched tomorrow.
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The Dow Jones continued to work on its fifth consecutive week of positive aspects after the index rose0.71% on Tuesday, closing at 34,152 factors. Meanwhile, the S&P 500 rallied and touched a three-month excessive however discovered resistance across the 200 Day Moving Average, a degree it has not closed above since April. The index closed with a marginal achieve of 0.19%.
The Consumer Staples and Consumer Discretionary Sectors led the positive aspects within the S&P 500 after giant retailers reminiscent of Walmart and Home Depot beat Q2 company earnings expectations. In Walmart’s case, regardless of having lowered its revenue steerage final month, the better-than-expected outcomes verify client energy in US markets. Home Depot shocked by reporting document revenue and income regardless of larger rates of interest and sticky inflation, though it will likely be attention-grabbing to see how their Q3 report evolves as indicators of a slowdown within the Housing Sector are rising. Another retail and meme stock, Bed Bath and Beyond, soared as retail traders have pushed up the closely shorted stock worth up to now days in an obvious brief squeeze much like what was seen final 12 months with Gamestop and AMC. Target and Lowe’s are resulting from report earnings tomorrow.
On the opposite hand, the Information Technology Sector confirmed losses as we speak after Citigroup downgraded Zoom Video Communications Inc from Neutral to Sell forward of the corporate’s earnings report subsequent week. Also, Apple, introduced greater than 100 layoffs of contract-based recruiters as a part of a beforehand introduced discount plan. These objects weighed on the Nasdaq100 which closed with a marginal lack of 0.23%.
On one other word, the US economic system continues to ship combined alerts in an surroundings of rising rates of interest. After yesterday’s disappointing Empire State manufacturing index, the discharge of July’s better-than-expected industrial manufacturing and capability utilization shocked traders. Today’s report from the Federal Reserve indicated that US industrial manufacturing elevated for the primary time in three months. The rise in output was pushed by a robust enhance in motorized vehicle manufacturing (helped by an easing of semiconductors provide bottlenecks) and was capable of offset a decline in family electronics, home equipment, and furnishings, – which is in keeping with the softer Housing Starts numbers launched as we speak too.
In retrospect, a slower CPI studying, combined manufacturing exercise, sturdy industrial manufacturing, softer housing, sturdy client spending and still-tight labor market, ought to give Fed officers “food for thought” on the subsequent FOMC assembly in September. But within the close to time period, all eyes are on the discharge of the July FOMC minutes, due tomorrow, as traders debate whether or not the Fed will sign a slower tempo of rate of interest hikes.
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—Written by Cecilia Sanchez-Corona, Research Team, DailyFX