Wall Street ends a touch higher, balancing a 25-50 basis point Fed cut scenario

It was a relatively subdued day in global markets on Monday, with scarce data flow and as the market awaits the outcome of next week's Federal Open Market Committee's meting while the Fed enters its communications blackout.

On a week where a third of the Dow Jones Industrial Average components are set to report earnings, the DJIA, rose 17.7 points, or 0.1%, at 27,171.9 while U.S. stock-market indexes closed higher on Monday. The S&P 500 index advanced 8.42 points, or 0.3%, to 2,985.03, supported largely by gains in the information-technology sector (up 1.2%) while the Nasdaq Composite Index COMP, +0.71%  gained 57.65 points, or 0.7%, to close at 8,204.14. The recover follows a set back on Friday following Bullard's less dovish comments who advocated for only a 25 basis cut from the Federal Reserve this month. 

US data

The June Chicago National Activity index fell short of expectations at -0.02. This was the seventh consecutive month that the index has suggested the economy has been operating below potential. Forty out of 85 indicators made positive contributions. All eyes will now be on US Gross Domestic Produce this week. 

We expect GDP to advance a near-trend 2.0% q/q saar in Q2, down from a strong 3.1% print in Q1. Unlike the prior quarter, we expect consumer spending to be a key engine of growth, rebounding to about 4% after a wobbly start to the year. Business investment, however, continued to slow due to heightened uncertainty while inventories and net exports were likely a drag on growth,"

analysts at TD Securities explained. 

DJA levels

The DJIA  index stays consolidated, printing a doji on the daily chart, albeit marking a higher low as it bases in the 27000s. On a break to the downside, below the 20-Day moving average at 26924, the 23.6% retracement of the 3rd June low to 12th July recently printed high falls in at 26706 which meets April 23rd and 1st May double-top highs. Then, the 23.6% retracement of the Dec 2018 to recent highs at 26056 come into play. The 38.2% Fibo at 25226, below the 200-day moving average, is a key target should the Fed be a let down.