US Stock Indexes Struggle Amid Earnings Reports and Fed Comments
Major US stock indexes are currently facing challenges due to a combination of factors, including US earnings reports and hawkish comments from Federal Reserve policymakers. Let’s take a closer look at what’s been happening in the market:
Earnings Season Updates
- Some companies have exceeded expectations, such as General Motors, while others like Verizon and GE Aerospace have fallen short.
- Verizon experienced a 4.9% loss after missing estimates for third-quarter revenue.
- 3M fell by 0.6% despite increasing the lower end of its full-year adjusted profit forecast.
The Dow Jones Industrial Average is showing potential for further upside, while the Nasdaq 100 remains rangebound. Despite the mixed results during earnings season, market participants remain hopeful for positive outcomes.
Market Reaction to Fed Comments and US Treasuries
US Treasuries saw an increase as markets reacted to more aggressive comments from Federal Reserve policymakers. The ongoing US Presidential debate is also impacting Treasury markets, with investors closely monitoring any potential changes to fiscal policy as betting odds favor a Donald Trump victory.
As we navigate through the current market landscape, it’s important to stay informed and prepared for potential shifts in the financial environment.
S&P 500 Heatmap
Among the notable names reporting recently, GE Aerospace dropped 6.3% despite boosting its 2024 profit forecast. This highlights the challenges companies may face in impressing investors this year.
On the other hand, General Motors rose 7.3% after its third-quarter results exceeded Wall Street expectations, while Lockheed Martin fell 4% following its results.
Magnificent 7 Hold the Key for S&P, Nasdaq 100
Markets are eagerly awaiting the reports from the magnificent 7 companies, with Tesla leading the way this week. These 7 companies hold significant weight in the market, making their performance crucial for overall market sentiment.
Despite recent recoveries, the magnificent 7 stocks are still trading below their all-time high levels. Nvidia, in particular, is closing in on Apple for the title of the world’s most valuable company.
US Equity Market Concentration
Source: The Kobeissi Letter
Technical Analysis
Dow Jones Industrial Index (US30)
From a technical standpoint, the US30 (Dow Jones) is currently displaying interesting price action. After a recent selloff, the index rebounded from a key support area, indicating potential upside.
Technical analysis suggests that a bullish continuation setup may be in play, with the possibility of a retest towards the resistance level. However, a close below a certain support level would invalidate this setup.
Nasdaq 100
The Nasdaq 100 remains rangebound between key support and resistance levels. With the upcoming reports from the magnificent 7 companies, the Nasdaq may experience fluctuations in the near future.
Immediate support and resistance levels are crucial to monitor for potential market movements. Stay informed and prepared for any shifts in the Nasdaq 100.
As we navigate through the current financial landscape, it’s essential to stay informed, prepared, and adaptable to market changes. By understanding the factors influencing the market and monitoring key indicators, investors can make informed decisions to navigate the dynamic world of finance.