US Market: Still Jittery this week. Read to know why !
Week in Review.
US market’s narrow advance continued for the week ending 14 Jun 2024. (see below)
2 of the 3 major indexes ended mostly higher for the week.
Both $S&P 500(.SPX)$ and $NASDAQ(.IXIC)$ touched new highs.
The market’s advance remained exceptionally narrow for the 2nd consecutive week.
For the week, the $DJIA(.DJI)$ was down -0.5%, S&P 500 rose +1.6% and Nasdaq was up the most +3.2%.
Last week’s catalysts.
(1) Consumer Price Index for May 2024.
On Wed, 12 Jun 2024, US headline inflation was flat for the first time in nearly 2 years.
Core inflation (MoM) rose +0.2%, a tick below expectations (0.3%) and a 7-month low.
Core inflation (YoY) fell to 3.4%, the lowest level since April 2021.
(2) FOMC June 2024 meeting.
The Fed left rates unchanged, as was widely expected,
However, officials increased their median expectation for the interest rate at the end of 2024 significantly, to 5.1% from the previous 4.6%.
Implying only one cut later in the year.
In the post-meeting statement, Fed officials acknowledged that there has been “modest further progress” on inflation, versus “a lack of further progress” in it 01 May 2024 post-meeting statement.
(3) Producer Price Index for May 2024.
On Thu, 13 Jun 2024, Producer price index (PPI) inflation, also surprised on the downside.
MoM data defied expectations for a slight increase, falling instead by -0.2%.
Core PPI (YoY) fell to 2.3%, marking an end to 5 consecutive months of increases.
(4) US Weekly Jobless claims.
For the week ended 8 Jun 2024, about 242,000 Americans filed for unemployment.
It is the most in almost a year.
Although calming inflation fears, the latest data raised concerns about the overall health of the US economy, in the process.
(5) Consumer Sentiments index.
Sentiment deteriorated in June as households worried about (a) inflation and (b) incomes.
On Fri, 14 Jun 2024, preliminary reading on Consumer sentiments (June 2024) was released. (see above)
Overall index came in at 65.6 compared to (i) May’s final reading of 69.1 and (ii) economists’ forecast of 72.0.
Week beginning 17 Jun 2024.
What could we expect of the US market this week and the 3 major indexes overall performance?
Below are possible catalysts (in no particular order, that I think) will influence the US market, this week.
(1) Juneteenth on Wed, 19 Jun 2024.
US celebrates the federated holiday on this day, making this a short trading week.
It was only in 2021 that President Biden signed a bill (passed by Congress), setting aside 19 June as a federal holiday.
(2) US Weekly Jobless claims.
For the week ended 15 Jun 2024, Wall Street’s forecast is approx. 235,000 claims.
This is a -2.89% decline from last week’s surprised data of 242,000.
(3) $Accenture PLC(ACN)$ quarterly earnings on Thu, 20 Jun 2024.
Formerly known as Andersen Consulting (consulting arm of Arthur Andersen, a large accounting firm in early 2000s), will be announcing its quarterly earnings.
It is a “worldwide” presence, professional services company, provides strategy and consulting,
(4) Quadruple Witching on Fri, 21 Jun 2024.
This coming Friday is the 3rd friday of June 2024, also known as quadruple witching..
This is a financial market event where four different sets of futures & options expire on the same day.
Futures and options are derivatives, linked to underlying stock prices.
When derivatives expire, traders must close or adjust positions.
That could trigger significant volume and order flow.
My viewpoints: (mine only)
I think the US market remains jittery this week.
Especially, on the run up to Juneteenth and Quadruple witching day.
Unsure if you noticed, traders usually “dump” stocks on the eve of a public holiday.
Factors contributing to the behaviour:
Reduced Liquidity: With fewer traders active due to the holiday, the market becomes less liquid. This means it can be harder to buy or sell securities quickly at a fair price. Any unexpected news could cause larger price swings.
Unforeseen Events: News can break anytime, and with the market closed on a holiday, investors might be anxious about potential negative events happening while they can't react.
Profit Taking: Some investors might choose to sell their holdings before the holiday to lock in profits or avoid potential losses during the market closure.
As usual, I will prefer to monitor first & foremost, especially news that would affect US market.
Only if there is/are “real bargains” buy-in opportunities. only then would I execute.
Given the short trading week, do you have a strategic plan on hand ?
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Do you think US market will continue to pan higher in this short trading week?
Do you think US market will dip on Tuesday (eve of Juneteenth ) and Thursday (run up to quadruple witching) ?
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Modify on 2024-06-26 22:11
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