Stock Market Breadth
The US economy’s most volatile first half of the year is over, and S&P 500 recorded its worst H1 since 1970. Several factors drove the price move for US stocks. Soaring inflation, geopolitical tensions, higher oil prices and a hawkish monetary are undoubtedly the most important ones. Now traders believe that recession is highly likely and global economic growth will likely slow down. This means the second half of the year could be even worse for the US stock market.
OIL
After dropping the previous session due to OPEC+’s announcement that it will continue to increase oil output in August and investors’ concerns about the global economy’s health, oil prices began to rise in early trade on Friday.
After two days of discussions, the producers in the OPEC+ group, including Russia, decided to adhere to their output policy on Thursday. However, starting in September, the producer club refrained from discussing policy.
Traders will remain focused on the supply and demand equation as it is very much driving the price. Investors widely believe that the path of the least resistance is still skewed to the upside as there were plenty of supply issues past August. For instance, tensions between Russia and the US allies aren’t going anywhere anytime soon, which means the supply disruption will likely remain in place. But this also means that the global economy is more likely to face a recession which could hamper oil demand.
Cryptos
Dutch stock exchange major The first Bitcoin (BTC) exchange-traded fund is being launched by Euronext Amsterdam, a division of the pan-European market Euronext (ETF).
The Bitcoin ETF will debut on Euronext Amsterdam next month, according to a London-based Jacobi Asset Management statement on Thursday. Under the symbol BCOIN, the spot Bitcoin ETF will begin trading on the Euronext Amsterdam Exchange.
It is the first time we will see the spot or physically-backed Bitcoin ETF product on the market, and the fund is not permitted to lend, stake, or leverage any of its assets. Remember, the most recent chaos in the market is mainly due to the lending of crypto assets by companies. These companies promised unreal yields to investors, and now more prominent players are being paid cents on the dollar, and the rest are forced into liquidation. Investors purchasing and exchange-traded Bitcoin products will hold the units that hold the Bitcoin for the first time in Europe.
Asian Markets
The Asian stock market traded lower on the week’s last trading day. The Nikkei index fell by 1.77%. The HSI index decreased by 0.62%, while the KOPSI index declined by 1.48%. The Shanghai index also dropped by 0.19%.
Dow Jones and S&P 500: Market Breadth
The Dow Jones’ market breadth lost further momentum. 32% of the Dow Jones stocks are trading above their 200-day moving average.
The S&P 500 stock breadth also confirmed some loss in its momentum. 34% of the shares traded above their 200-day moving average.
Dow Jones Futures Today
The Dow Jones futures are trading lower today. In terms of economic data, investors will be looking at the US ISM manufacturing PMI reading, which will be coming out at 14:00 GMT. The forecast is for 54.6, while the previous reading was 56.1. In addition, we also have the Construction Spending Prices number coming out, and the forecast is for 0.3% against the previous number of 0.2%.
The Dow Jones futures are trading lower, and the index has failed to break above the 50-day SMA on the daily time frame. The fact that the price has rejected the 50-day in less than two weeks tie indicates that prices are likely to move lower, and it is expected that more pain could be ahead of the index. In addition, the Dow Jones index continues to trade below the 100 and 200-day SA on the daily time frame, which further confirms that the path of the least resistance is skewed to the downside.
As for the RSI, it indicates that prices are not oversold on the daily time frame. Currently, the RSI is trading at 45.
The near-term support is 29,298, while the resistance is 32,146.
Stock Market Rally
The S&P 500 stock index closed lower on Thursday, increasing by 0.88%. The energy sector led the index lower, and four sectors closed lower yesterday.
The Dow index plunged on the second last trading day of the week; the Dow stocks moved the index lower by 0.82%. Seven shares advanced, while 21 shares closed lower.
The tech-heavy index’s NASDAQ composite closed lower by 1.33% yesterday.
S&P 500 Leaders and Laggards: Enphase and Walgreens Boots
Enphase stock contributed the most significant gain, soaring 5.4%. Walgreens Boots stock was the most considerable drag; it fell by 7.2%. The S&P 500 stock index is down 21% so far this year.
Dow Jones Leaders and Laggards: Travelers and Walgreens Boots
Travelers company provided the most significant help for the Dow Jones; it advanced by 2.0%, while Walgreens Boots was the largest decliner, it fell by 7.2%.