Stock Market Today
The U.S. stock market is highly likely to face higher volatility this week as a raft of heavy-weight tech companies report their earnings. Investors will be closely looking at the earnings from Apple, Google's Alphabet, Amazon, Facebook and Twitter. In addition to this, we also have the U.S.'s third-quarter GDP reading due on Thursday, which is likely to set the tone for the dollar index, and this means more volatility for the Forex market.
The Asian stock market closed mostly lower on the first day of the week. At the time of writing this, the HSI index was trading up by 0.54%. The Korean Kospi index also moved lower by 0.62%, while the Nikkei index declined 0.09%. The Shanghai index fell by 1.10%.
Dow Jones and SP 500: Market Breadth
The Dow Jones' market breadth gained some momentum. 67% of the Dow Jones stocks traded above their 200-day moving average. This is a change of +4% from a day earlier.
The S&P 500 stock breadth became healthier on Friday. 72% of the shares traded above their 200-day moving average. This is a change of +3% from a day earlier.
Dow Jones Futures Today
The Dow Jones futures are trading lower by 120 points today. In terms of economic data, investors will be looking at the U.S New Home Sales number, which is expected to come in at 1025K. The forecast is for 1011K. It is likely that we may see the number going a little higher than the expectations because of lower interest rates.
The Dow Jones futures are still trading above the 50-week simple moving average, and the price is trading nearly 6% above this average. This means there is a possibility of a mean-reversion trade—when price reverts to its moving average. The last time we saw the mean reversion trade for the Dow Jones was 4-weeks ago. Bulls are still in control of the price and this is because the 50-week moving average is trading above 100 and 200-week moving average. This means that long-term investors may not need to worry much.
The S&P 500 index, which represents the broader stock market, has formed a lower low as compared to the previous week. This means that the bulls are struggling to push the price higher and we need a new catalyst for this to happen. Having said that, the price is still above the 50, 100 and 200-week moving averages which means the bull trend is firmly in place.
Stock Market Rally
The S&P 500 stock index closed in positive territory on Friday, the index increased by 0.34%. The communication sector led the index higher - 9 and out of 11 sectors closed higher.
The Dow index failed to hold on to its gains on Friday; the Dow stocks moved the index lower by 0.10%. 15 shares of the Dow fell, and 14 closed higher.
The NASDAQ composite, a tech-savvy index, advanced 0.63% on Friday.
SP 500 Leaders and Laggards: SVB and Intel
SVB financial stock contributed the biggest gain, soaring 3.97%. Intel stock was the largest drag; it fell by 10.6%. The S&P 500 stock index is up 7.3% so far this year.
Dow Jones Leaders and Laggards: UnitedHealth and Intel
UnitedHealth stock advanced higher by 1.5% and was the biggest mover for the Dow, while Intel stock declined 10.6%, the biggest drag for Dow Jones Industrial Average index.
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