Market Update: Mixed Futures and Key Economic Data Ahead
U.S. Futures Muted
U.S. stock futures were relatively flat on Monday as investors braced for upcoming economic data and commentary from Federal Reserve policymakers that could influence potential interest rate cuts later this year. The Nasdaq Composite edged up slightly on Friday, marking its fifth consecutive record close. Meanwhile, the S&P 500 and the Dow Jones Industrial Average closed slightly lower.
In individual stocks, Adobe (ADBE) saw its shares surge by more than 14% after raising its annual revenue forecast, driven by growing demand for its AI-enhanced products. Nvidia (NVDA), the AI chipmaker, also gained 1.8%, briefly surpassing Apple as the world’s second-largest company by market capitalization.
U.S. Retail Sales and Fed Commentary Ahead
This week, investors will focus on U.S. retail sales data for May, set to be released on Tuesday. Economists expect a 0.3% month-on-month rise, following a flat reading in April. Consumer spending remains a key area of interest as investors gauge the impact of higher interest rates on the economy.
The Federal Reserve recently reiterated the need for more evidence of sustained inflation cooling to their 2% target before cutting rates. Traders will also be attentive to comments from several Fed officials, including New York Fed President John Williams, Minneapolis Fed President Neel Kashkari, San Francisco Fed President Mary Daly, and Richmond Fed President Thomas Barkin. Last Friday, Chicago Fed President Austan Goolsbee expressed a desire for more consistent data showing easing inflation before considering rate cuts.
Starboard Value Takes Stake in Autodesk
Activist investor Starboard Value has acquired a stake worth approximately $500 million in Autodesk, according to the Wall Street Journal. Starboard is advocating for changes within the company, including enhancing its margins, modifying its board, and addressing a recent accounting investigation. The investor is considering legal action to reopen Autodesk’s director nomination window and postpone its annual shareholder meeting scheduled for July 16.
Chinese Industrial Output Slows
Chinese industrial production growth slowed more than expected in May, and property prices also declined, highlighting challenges in bolstering the world’s second-largest economy. Industrial output rose by 5.6% year-over-year, down from 6.7% in April, while new home prices dropped by 0.7% month-on-month, the steepest decline since 2014. The data underscores the difficulties faced by Chinese policymakers in stimulating economic growth amid a struggling real estate market.
Oil Prices Steady
Oil prices steadied on Monday as traders absorbed the latest industrial production data from China and a U.S. survey indicating a slowdown in demand. On Friday, U.S. consumer sentiment hit a seven-month low in June due to concerns over inflation and high borrowing costs. The lower-than-expected industrial production figures from China also pointed to an uneven recovery in the world’s largest oil importer.
$SPX/$SPY- Last week we said buyers can continue to show acceptance above the 5368.25 level, price would target the 5400 psychological level, with likely continuation into 5435 and 5470.” Buyers did indeed continue to show acceptance above 5368.25, and price made a weekly high of 5454.5, right in the middle of the two upside targets shared last week.
With the contract roll upon us, starting on Monday I will personally be transitioned to the ESU24 (September) contract. Today’s analysis will be on that contract, with back-adjusted charts. With a holiday in the middle of this week (markets are closed on Wednesday), contract roll, and no major economic data prints, the expectation is for a slower week.
The main watch for this week will be 5507, which was last week’s volume point of control. A break and hold above this level would signal the next leg higher into the upside reference point at 5535, 5575, and 5600. If price continues to hold below 5507, a retest into 5475, 5450, and 5410 can be seen.
As mentioned, a slower week is expected and continued action within the near-term range will be likely early in the week. This week will require more of a day-to-day approach.
Upside levels of interest: 5535, 5575, 5600
Downside levels of interest: 5475, 5450, 5410
Notable Economic Data
- All week: Fed Speak
- Tuesday: Retail Sales, 20Y Auction
- Wednesday: Market is closed
- Thursday: Jobless Claims
See you all in chat
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