US Market Review 1st July 2021

by Charalambos Constantinides

Walmart stock rose to all time highs at 153.66 on December 1st 2020. The price since then dropped and bottomed at 126.28 on March 4th 2021 where the drop came to an end. The price reached fresh yearly highs on May 18th at 144.58 on Earnings announcement day and since then it did not go above this level. The price is now at 141.00 level and it is testing to break the valid downtrend line formed from the December 1st 2020 all-time high. The Stochastic Signal line is crossed above the Stochastic Line and is ready to go into overbought area above the 80 level, indicating a possible bullish tendency. The price is trading above both the 50 Day Moving Average (MA50) and the 100 Day Moving Average (MA100). The MA50 is bullishly crossed above the MA100 but both are flat-sloping.
For the bulls, important resistance points provided the downtrend line breaks exist at 144.58 derived from the May 18th top, also at 147.54 from a February 17th top, and finally at 150.87 which is the 161.8% Fibonacci Extension of the last downward move.
For the bears, important support points exist at 140.00 where the MA50 stands, also at 138.00 where the MA100 stands, and finally at 134.42 which is the June 18th bottom of the last downward move.

It is a very busy day on the economic calendar in the US and Canada. Stats expected on Challenger Job Cuts y/y, Unemployment Claims, Final Manufacturing PMI, ISM Manufacturing PMI, and Natural Gas Storage among others. Canada market is closed for a public holiday.
• Shares on major United States markets closed mostly higher on Wednesday after the latest economic data releases showed that the number of US private sector rose by 692,000 in June while pending home sales surged 8% in May.
The Dow Jones Industrial Average index was up 0.61% at the close with Walmart, its best performer, rising 2.71%. The Nasdaq 100 declined 0.12% at the end of the trading session as Pinduoduo dropped 4.89%. The S&P 500 reached a new closing record after a 0.13% gain.

• Pending home sales in the United States jumped 8% in May compared to the previous month, the National Association of Realtors (NAR) said on Wednesday. The Pending Home Sales Index (PHSI) stood at 114.7 in May, strongly exceeding market expectations. The index soared 13.1% on a yearly basis.

• The number of jobs in the United States private sector rose by 692,000 in June compared to the previous month, exceeding analyst expectations, the ADP National Employment Report showed on Wednesday.
The largest number of new jobs were added in the leisure and hospitality sector with 332,000 people hired.

• The Federal Reserve’s tapering of its asset purchases, which he hopes will start “soon,” will run smoother this time around because investors already know that a move is being discussed, said Federal Reserve Bank of Dallas President Robert Kaplan.
Kaplan said the Fed learned a number of lessons in 2013, when it first announced a slowing its purchases of Treasuries and mortgage-backed securities following the global financial crisis. The news caused a violent spasm in financial markets as investors sold riskier assets for the safety of bonds in an episode dubbed the “taper tantrum.”

Important Daily Events:

• At 11:30 (GMT) US Challenger Job Cuts y/y expected. This indicator measures the change in the number of job cuts announced by employers. It is released monthly, on the first Thursday after the month ends.

• At 12:30 (GMT) US Unemployment Claims results expected to come out. This is an indicator measuring the number of individuals who filed for unemployment insurance for the first time during the past week.

• At 13:45 (GMT) US Final Manufacturing PMI coming up. This is a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy.

• At 14:00 (GMT) US ISM Manufacturing PMI is due. This is a survey of about 300 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

• At 14:30 (GMT) US Energy Information Administration Natural Gas Storage will be announced. This is a measure of the change in the number of cubic feet of natural gas held in underground storage during the past week.

US Indices Yesterday:

• Dow Jones +0.61%
• S&P 500 +0.21%
• Nasdaq -0.17%

Sources: Investing.com, forexfactory.com, breakingthenews.net