- Dow Jones climbed around one hundred points amid tepid Monday markets.
- Broad-market hopes for a Fed rate cut have run into the ceiling.
- Key US activity and inflation data looms ahead later in the week.
The Dow Jones Industrial Average (DJIA) climbed around one hundred points on Monday in a thin recovery from last week’s late pullback. Equities are drifting into the high end, but the Dow Jones is holding steady as investors gear up for a fresh round of key US data due later in the week.
According to the CME’s FedWatch Tool, rate markets are still pricing in an all-but-certain rate cut from the Federal Reserve (Fed) in September. Rate traders are pricing in 95% odds of at least a quarter-point rate trim when the Federal Open Market Committee (FOMC) meets on September 18.
A fresh round of S&P Global Manufacturing and Services Purchasing Managers Index (PMI) figures are due on Wednesday, followed by a Gross Domestic Product print on Thursday. Friday will wrap up the trading week with an update to the Personal Consumption Expenditure - Price Index (PCE) inflation figures.
Market participants looking for a Fed rate cut will be hoping for easing figures, and Wednesday’s Services PMI for July is expected to ease to 54.4 from 55.3. Annualized Q2 US GDP is expected to accelerate to 1.9% from 1.4%, and Friday’s PCE Price Index inflation for June is broadly expected to tick higher on the near end of the curve, forecast to print at 0.1% MoM versus the previous 0.0% print.
Dow Jones news
About a third of the Dow Jones is in the red on Monday, with concentrated losses in major names keeping prices more subdued across the wider index. Verizon Communications Inc. (VZ) reported a miss against quarterly revenue estimates, falling nearly 7% to $38.78 per share. On the high side, Nike Inc. (NKE) recovered ground on Monday, climbing 3.3% to $75.09 per share.
Dow Jones technical outlook
The Dow Jones is cycling familiar levels on Monday, but leaning into the bullish side. Intraday price action is crimped below 40,500.00, while a near-term floor is priced in near 40,200.00. Despite a rapid pullback from record highs last week, the Dow Jones is still trading firmly north of the 200-day Exponential Moving Average (EMA) at 37,893.31, and it won’t take much of a push for a fresh round of bidding to test into new record prices near 41,500.00.
Dow Jones five minute chart
Dow Jones daily chart
Economic Indicator
S&P Global Services PMI
The S&P Global Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector. As the services sector dominates a large part of the economy, the Services PMI is an important indicator gauging the state of overall economic conditions. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for USD.
Read more.Next release: Wed Jul 24, 2024 13:45 (Prel)
Frequency: Monthly
Consensus: 54.4
Previous: 55.3
Source: S&P Global
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: Next stop emerges at 0.6580
The downward bias around AUD/USD remained unabated for yet another day, motivating spot to flirt with the area of four-week lows well south of the key 0.6700 region.
EUR/USD looks cautious near 1.0900 ahead of key data
The humble advance in EUR/USD was enough to partially leave behind two consecutive sessions of marked losses, although a convincing surpass of the 1.0900 barrier was still elusive.
Gold extends slide below $2,400
Gold stays under persistent bearish pressure after breaking below the key $2,400 level and trades at its lowest level in over a week below $2,390. In the absence of fundamental drivers, technical developments seem to be causing XAU/USD to stretch lower.
Why this week could be explosive for Ethereum
Ethereum (ETH) is down nearly 1% on Monday as exchanges have begun confirming Tuesday as the launch date for ETH ETFs. Considering the ETH ETF launch and the upcoming Bitcoin Conference, this week could prove crucial for Ethereum.
What now for the Democrats?
Like many, I applaud Biden’s decision. I would have preferred that he’d made it sooner, but there’s still plenty of time for the Democrats to run a successful campaign. In fact, I wish something on the order of a two-month campaign – as opposed to a two-year campaign – were the norm and not the exception.