In this week’s coverage, we analyze the price breakout in both the Russell 2000 and gold futures markets. We will also examine the economic reports and earnings announcements expected next week.
Commentary and charts reflect data at the time of writing (Friday, July 12 at 1 PM ET), and market conditions may change by the publication of this analysis.
September E-Mini Russell 2000 Index Futures (RTY) Weekly Chart
The September E-mini Russell 2000 Index futures broke out above the key level of 2,100 this week, closing at the highest level since January 2022. Trader and investor expectations for a Fed funds rate cut in September, along with improving inflation numbers, are driving this new bullish sentiment. The 8-bar RSI oscillator is getting close to being overbought here but still has some room to the upside, and in a strong rally can stay overbought for a number of weeks. The MACD indicator has been negative since early April and with this week's rally, and with any upside follow through next week, we will see MACD cross above zero into bullish territory, potentially signaling additional upside prices. The next key resistance level for the Russell is at 2,200, which was a key support level for most of 2021. If the market were to turn around, we could see support at 2,100 and at the 14-week moving average around 2,050.
September E-mini Russell 2000 Index futures (RTY) weekly chart
August Gold Futures (GC) Weekly Chart
August gold futures have been up four out of the last five weeks after testing the $2,300.00 an ounce level in early June. The all-time high for the gold futures is 2,452.20, which is only one or two good positive weeks away. Crossing above the 2,400 level this week provides some additional bullish sentiment as this is the first week it has closed above that level since May. Gold has been consolidating since early April, allowing the 14-week moving average to catch up. That 14-week average has been acting as good support for the bottom of these last few weekly candles. The 8-bar RSI oscillator is reading just below overbought but has plenty of room to move further to the upside. Although the MACD indicator is still below 0, another good week or two here in the gold futures could move MACD back above zero into bullish territory. The all-time high along with the 2,450 level could prove to be tough resistance to get through for this market. If new highs fail, look for good support at 2,400 and then even stronger support at 2,350.
August gold futures (GC) weekly chart
Companies Reporting Earnings July 15 - 19
Earnings season gets underway as Tuesday morning brings reports from the financial services sector: banks (Bank of America, Morgan Stanley, State Street Corp), financial services (Schwab, PMC Financial) and insurance (Progressive).
The biggest Dow Jones Index company by weight, United Healthcare, also reports Tuesday before market open, so look for volatility in YM/MYM futures. Other Dow companies reporting are Johnson & Jonson (Wednesday morning) and American Express and Travelers (Friday morning).
Other financial sector companies are U.S. Bancorp (Wednesday morning) and Discover (Wednesday afternoon). Not much is happening Thursday, save for a couple of big names in the tech sector: Taiwan Semiconductor and Netflix – Nasdaq and S&P 500 futures could see some movement when those companies report. Finally, SLB might provide some insight into the crude oil, petroleum distillates, and natural gas supply/ demand situation, as their focus is servicing oil and gas producers, globally.
| Date | Companies Earnings |
|---|---|
| Monday, July 15 | N/A |
| Tuesday, July 16 | Bank of America Corp. (BAC): $0.79 EPS Estimate, $25.24B Revenue Estimate (BMO) Morgan Stanley (MS): $1.66 EPS Estimate, $14.23B Revenue Estimate (BMO) State Street Corp. (STT): $2.01 EPS Estimate, $3.15B Revenue Estimate (BMO) PNC Financial Services Group, Inc. (PNC): $3.00 EPS Estimate, $5.30B Revenue Estimate (BMO) Charles Schwab Corp. (SCHW): $0.74 EPS Estimate, $4.68B Revenue Estimate (BMO) Progressive Corp. (PGR): $2.02 EPS Estimate, $18.03B Revenue Estimate (BMO) United Health Group, Inc. (UNH): $6.68 EPS Estimate, $98.95B Revenue Estimate (BMO) * |
| Wednesday, July 17 | Johnson & Johnson (JNJ): $2.73 EPS Estimate, $22.38B Revenue Estimate (BMO) * U.S. Bancorp (USB): $0.96 EPS Estimate, $6.81B Revenue Estimate (BMO) United Airlines (UAL): $4.00 EPS Estimate, $15.20B Revenue Estimate (AMC) Discover Financial Services (DFS): $3.01 EPS Estimate, $4.16B Revenue Estimate (AMC) |
| Thursday, July 18 | Taiwan Semiconductor (TSM): $1.34 EPS Estimate, $19.95B Revenue Estimate (BMO) Netflix, Inc. (NFLX): $4.70 EPS Estimate, $9.53B Revenue Estimate (AMC) |
| Friday, July 19 | American Express Co. (AXP): $3.21 EPS Estimate, $16.57B Revenue Estimate (BMO) * Travelers Companies, Inc. (TRV): $2.75 EPS Estimate, $11.47B Revenue Estimate (BMO) * SLB (SLB): $0.83 EPS Estimate, $9.07B Revenue Estimate (BMO) |
* indicates that this company is in the Dow Jones Index
Economic Reports for the week of July 15 - 19
The week starts off with possibly the most impactful event this week when Fed Chair Jerome Powell speaks at the ECB Forum on Central Banking at noon ET. The Empire State Manufacturing Index arrives two hours earlier, and while it hasn’t been on the expansionary side of zero since November last year, the trend has been improving since January.
In contrast, the Philly Fed Manufacturing Index has been positive for most of the year, though the last two months have been trending down from the high in April. The housing market is represented by the Housing Market Index on Tuesday and Housing Starts and Permits on Wednesday. The federal reserve releases the beige book on Wednesday afternoon as a precursor to the FOMC two weeks later. In this report, each Federal Reserve district describes current economic situations for their region.
Fed speakers are busy this week: in addition to Chair Powell on Monday, six other presidents and governors have speaking engagements scheduled–most notably New York Federal Reserve Bank President John Williams on Friday morning. After Friday, the Fed speakers go into silent mode until the day after the FOMC announcement on July 31. Options expiration occurs on Friday, so look for directional movement in the futures market leading up to Friday.
| Date | Economic Reports |
|---|---|
| Monday, July 15 | 8:30 AM ET: Empire State Manufacturing Index * 11:00 AM ET: Export Inspections 12:00 PM ET: Fed Chair Jerome Powell Speaks *** 4:00 PM ET: Crop Progress 4:35 PM ET: San Francisco Fed Reserve Bank President Mary Daly Speaks |
| Tuesday, July 16 | 8:30 AM ET: Retail Sales * 8:30 AM ET: Import and Export Prices 10:00 AM ET: Business Inventories 10:00 AM ET: Housing Market Index 2:45 PM ET: Federal Reserve Governor Adriana Kugler Speaks 4:30 PM ET: API Weekly Oil Stocks |
| Wednesday, July 17 | 7:00 AM ET: MBA Mortgage Applications 8:30 AM ET: Housing Starts and Permits 9:15 AM ET: Industrial Production * 10:00 AM ET: Atlanta Fed Business Inflation Expectations 10:30 AM ET: EIA Petroleum Status Report * 2:00 PM ET: Beige Book * |
| Thursday, July 18 | 8:30 AM ET: Jobless Claims *** 8:30 AM ET: Philadelphia Fed Manufacturing Index * 8:30 AM ET: Export Sales 10:00 AM ET: Leading Indicators 10:30 AM ET: EIA Natural Gas Report * 1:45 PM ET: Dallas Fed Bank President Lorie Logan Speaks 4:00 PM ET: Treasury International Capital 4:30 PM ET: Fed Balance Sheet 6:05 PM ET: San Francisco Fed Reserve Bank President Mary Daly Speaks 7:30 PM ET: Federal Reserve Governor Michelle Bowman Speaks |
| Friday, July 19 | 10:40 AM ET: New York Fed Bank President John Williams Speaks 1:00 PM ET: Baker Hughes Rig Count 1:00 PM ET: Atlanta Fed Bank President Raphael Bostic Speaks 3:00 PM ET: Cattle On Feed |
*** Market Moving Indicators
* Merit Extra Attention
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