Dow Jones Industrial Average churns on middling Wednesday markets

Dow Jones hung up on the 39,000.00 handle amid quiet midweek markets.
Fedspeak continues to press down on rate cut hopes.
Investors buckle down for the wait to key data on Thursday and Friday.

Joshua Gibson FXStreet

The Dow Jones Industrial Average (DJIA) is churning just above 39,000.00 in tepid Wednesday trading as markets hunker down for the wait to key data in the back half of the trading week. Federal Reserve (Fed) officials have repeatedly noted the need for patience on policy rates. The US central bank continues to look for firmer signs that inflation will continue easing to the Fed’s 2% annual target. A notable lack of economic slowdown and a still-tight labor market leaves the Fed with little need to rush into rate cuts. Several Fed officials have cautioned that there might be no rate cuts in 2024, while the Fed’s median dot plot of rate expectations suggests only a single quarter-point cut for the year.

A notable lack of data on Wednesday leaves investors to fidget in place and wait for a raft of key US datapoints slated for release on Thursday and Friday. US Durable Goods Orders, a revision to first-quarter US Gross Domestic Product (GDP), and Initial Jobless Claims are all due Thursday. Friday will round out the trading week with a fresh print of US Personal Consumption Expenditure Price Index (PCE) inflation figures for May.

Investors with hopes pinned on at least a quarter-point rate cut from the Fed in September will look for soft-but-not-too-soft US economic figures. Too good a print means the Fed will be even less likely to deliver an early rate trim, while too bad of a data calendar will mean the US is headed for a recession, leaving rate-cut-hungry markets to dream of a happy middle ground.

Dow Jones news

The Dow Jones is up a scant 30 points rounding the corner into the final stretch of Wednesday’s US market session. The major equity index is getting propped up by firm gains in market favorites, but most of the Dow Jones’ constituent securities are in the red on Wednesday, with two-thirds of the listed stocks softly in the red.

Amazon.com Inc. (AMZN) surged nearly 4.5% on Wednesday, approaching $195.00 per share, with Apple Inc. (AAPL) struggling to keep pace, rising 2.3% to $214.00 per share. On the downside, Amgen Inc. (AMGN) and Travelers Companies Inc. (TRV) are each down around 1.7% apiece, with Amgen falling below $315.00 per share and Travelers Companies falling to $205.00 per share.

Dow Jones technical outlook

Dow Jones remains within touch range of the previous day’s closing bids near 39,100.00 on Wednesday. The DJIA remains down from last week’s peak near 39,600.00, but a near-term floor is priced in at Wednesday’s early lows just above 38,900.00.

Daily candlesticks continue to hold just above the 50-day Exponential Moving Average (EMA) at 38,878.00 as bidders try to drag the large-cap index back towards all-time highs set in May just north of the 40,000.00 major handle.

Dow Jones five minute chart

Dow Jones daily chart

Economic Indicator

Personal Consumption Expenditures - Price Index (MoM)

The Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US).. The MoM figure compares prices in the reference month to the previous month. Price changes may cause consumers to switch from buying one good to another and the PCE Deflator can account for such substitutions. This makes it the preferred measure of inflation for the Federal Reserve. Generally speaking, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.