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- The US GDP increases 1.4% in line with analysts’ expectations. The USD Index falls 0.17% and continues to be the day’s worst performing currency.
- The US Weekly Unemployment Claims continue to remain high but do not read higher than previous expectations.
- Durable Goods Orders grow 0.1% which supports the US Stock Market.
USA500
The US Stock Market rises after the release of the latest GDP, Durable Goods and Unemployment Claims. However, the medium-term price characteristics continue to point towards a sideways price movement. Investors over the next week will look to obtain enough data ahead of the upcoming earnings season to position their portfolios accordingly.
Investors will mainly look to tomorrow’s Core PCE Price Index as well as the latest NFP Employment Change. Analysts expect Core PCE Price Index to fall from 2.7% to 2.6%. However, if the rate fails to decline, the stock market may come under pressure from a lack of data signalling a rate adjustment. Currently, the market continues to price in a rate cut in September 2024. According to most analysts, if this cut does not come, the USA500 potentially can be overpriced.
Even though the SNP500 is showing signs of a bullish market movement, there continue to be signs of a wide price range. For example, of the top 25 most influential stocks, 52% are trading lower in the pre-trading hours. In addition to this, the index continues to remain below and honour the reoccurring resistance level.
Meanwhile, the future actions of the US Federal Reserve remain uncertain. Despite a slight decrease in the consumer price index from 3.4% to 3.3% in May, American officials are still considering the possibility of maintaining the current tight monetary policy for an extended period and even a potential increase in borrowing costs if necessary. However, upcoming economic data could impact the Fed’s decisions. Today’s statistics include the gross domestic product (GDP) for the first quarter, and on Friday, the May personal consumption expenditures price index will be released.
However, today’s economic data is in line with a bullish short-term view. The data continues to indicate stability, economic growth but no upward pressure on inflation. In addition to this, most assets are increasing in value during the European Cash Open signalling a strong investor sentiment and higher risk appetite. Lastly, the VIX, which is a well-known sentiment index, trades lower which also tends to support the stock market.
The main concern for investors is the Resistance Level at $5,492.10, but nonetheless, the price continues to trade above 75-Bar EMA and indicate a short term upward price movement.
Michalis Efthymiou
Market Analyst
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