{"id":88307,"date":"2024-07-17T13:41:13","date_gmt":"2024-07-17T10:41:13","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=88307"},"modified":"2024-07-17T13:42:49","modified_gmt":"2024-07-17T10:42:49","slug":"equities-report-bullish-tendencies-maintained","status":"publish","type":"post","link":"https:\/\/www.smartchinaeducation.com\/es\/equities-report-bullish-tendencies-maintained\/","title":{"rendered":"Equities report: Bullish tendencies maintained"},"content":{"rendered":"

The bullish tendencies of S&P 500, Nasdaq and Dow Jones seem to remain present despite some mixed signals being send over the past week. In this report, we are to discuss primarily the fundamentals surrounding US stockmarkets but also the upcoming earnings releases and finish off the report with a technical analysis of S&P 500\u2019s daily chart.<\/p>\n\n\n\n

Financial data released and what lies ahead<\/h2>\n\n\n\n

Before we have a look at what lies ahead in regards to financial releases, we note the easing of inflationary pressures in the US economy during June as the CPI rates tended to slow down for the past month. It\u2019s characteristic that the headline rate slowed down beyond market expectations reaching 3.0%yoy if compared to May\u2019s 3.3%yoy, while prices even contracted on a month-on-month level. On a core level, inflation ticked down enhancing the signal of easing inflationary pressures in the US economy. The release was somewhat contradicted by the acceleration of the PPI rates for the same month somewhat, yet we expect that should there be further signs that inflationary pressures are on the retreat in the US economy we may see US stockmarkets getting some support. Furthermore we note that the demand side of the US economy seems to be resilient as the retail sales growth rates for June came in better than expected, with the core rate even accelerating on a month on month level. Further signs of strong demand in the US economy could add more support for US stockmarkets. Today we note the release of the US industrial production for June and tomorrow July\u2019s Philly Fed Business index. Should the indicators\u2019 readings come in better than expected implying also some resilience for the production side of the US economy we may see US stockmarkets being supported.<\/p>\n\n\n\n

The Fed\u2019s stance<\/h2>\n\n\n\n

The easing of inflationary pressures in June, in conjunction with a cooling of the US employment market for the same period, intensified the market\u2019s current expectations for the Fed to start cutting rates in September and deliver another two rate cuts within the year, one on November and one in December. The intensification of the market\u2019s expectations tends to add more pressure on the Fed to ease its hawkishness, something that may have been implied by Fed Chairman Powell last week. We expect that should more Fed policymakers ease their hawkishness and maintain a more dovish outlook for the Fed\u2019s intentions, we may see US stockmarkets getting additional support. We tend to view the Fed\u2019s monetary policy stance as the key factor behind the direction of US stockmarkets along with the markets\u2019 excitement for the possibilities offered by AI.<\/p>\n\n\n\n

The assassination attempt on Trump<\/h2>\n\n\n\n

On a deeper fundamental level, Saturday\u2019s assassination attempt on former President Trump, may had enhanced uncertainty somewhat, yet that effect calmed down quickly. On the flip side the unsuccessful attempt, seems to have caused a rally around the flag effect for Trump supporters and thus enhanced the possibility for him to get elected. Should market expectations enhance for such a scenario we may see riskier assets such as US stockmarkets getting some support as in parallel, the market\u2019s expectations for the Republicans to return to the White House and deliver tax cuts, could strengthen the optimism of the market.<\/p>\n\n\n\n

Worries for China<\/h2>\n\n\n\n

Our worries for the recovery of the Chinese economy tended to intensify after Monday\u2019s Asian session, as a number of Chinese data released, were alarming. The GDP rate for Q2, and the retail sales for June slowed down beyond market expectations but also the urban investment and the industrial output growth rates decelerated, while house prices contracted deeper, all being for June. Calls for supportive measures by the People\u2019s Bank of China have intensified. Should market\u2019s worries for the difficulties faced by the Chinese economy intensify, we may see some cautiousness settling in among investors that could have adverse effects on US stockmarkets.<\/p>\n\n\n\n

Earnings season releases<\/h2>\n\n\n\n

As for earnings we note the release of the relevant report for Netflix tomorrow, yet the heavy point of earnings releases is expected to be next Tuesday when we get the earnings reports of Microsoft (MSFT), Alphabet A (GOOG), Tesla (TSLA), Visa A (V), Louis Vuitton ADR (LVMUY), Coca-Cola (KO), General Electric (GE), Philip Morris (PM) and General Motors (GM) among others. We expect attention to be set primarily on the big Tech companies Microsoft and Alphabet which could also be setting the tone for US stockmarkets, given the AI frenzy dominating the markets.<\/p>\n\n\n\n

An\u00e1lisis t\u00e9cnico<\/h2>\n\n\n\n

US500 Cash Daily Chart<\/h2>\n\n\n\n
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