Equity futures fell slightly into the red this morning following yesterday’s strong performance. Traders will be looking at earnings from semiconductor maker NVIDIA (NVDA), which is slated to report after the close and has a large weighting in both the NASDAQ and S&P 500 after rising to more than $3 trillion in market capitalization.
The stock market moved higher yesterday, benefiting from several economic reports. Those included the S&P Case-Shiller Home Price Index, which showed that home prices increased 5.4% year over year in June, marking an all-time high for the fourth-consecutive month. Elsewhere, U.S. consumer confidence came in better than expected yesterday, helping to bolster sentiment. The major market indices moved higher on this data, reaching their peaks near the end of the trading session. Overall, the S&P 500 increased nine points (up 0.16%) and the NASDAQ was up 29 points (up 0.16%), with the Dow Jones Industrial Average advancing by 10 points (up 0.02%) while finishing at an all-time high closing price. Despite these averages moving higher, market breadth was somewhat negative, with decliners outpacing advancers by a 1.3-to-1.0 ratio. Technology stocks were amongst the best performers on the day, while energy issues were amongst the weakest.
In commodity news, oil prices declined yesterday as traders priced in weaker demand expectations from China and higher levels of shale production. Elsewhere, U.S. Treasury Bond yields were largely lower yesterday after an initial rise, as traders priced in the potential for interest-rate cuts from the Federal Reserve. Gold spot prices reached an all-time high after continuing to trend upward over the past several months, as traders believe this commodity would benefit from a loosening of monetary policy. The Chicago Board Options Exchange Volatility Index, or VIX, commonly known as the fear index, declined yesterday as traders bought less option protection.
Several economic reports will be issued in the days ahead. These include initial jobless claims, the second revision to second-quarter GDP, and pending home sales for July on Thursday. On Friday, the core- and noncore Personal Consumption Expenditures (PCE) Price Index for July will be released, which will likely be closely watched by the Federal Reserve. The final University of Michigan’s consumer sentiment survey is also due out that day.
On the earnings front, very few earnings results will be on the docket in the days ahead, though Dow-30 component Salesforce (CRM) will report earnings after the close today, and as mentioned, AI giant NVIDIA as well. - John E. Seibert III
At the time of this article’s writing, the author held positions in one or more of the companies mentioned.
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