In this week’s coverage, we analyze the bullish extension in the E-mini Dow Jones Index, and the pullback in British pound futures. We also examine the economic reports and earnings announcements expected next week.
Commentary and charts reflect data at the time of writing (Friday, July 19 at 3 PM ET), and market conditions may change by the publication of this analysis.
September E-Mini Dow Jones Index Futures Weekly Chart
September E-mini Dow Jones Index futures made an all-time high of 41,672 last week, before sellers came in and knocked this market down, finishing the week with a bearish shooting star pattern. Last week’s close was near the recent high closes at the end of March and mid-May–creating a potential triple top. RSI recently showed bearish divergence, with these equal high closes on price not supported by a weakening RSI. While these indications could be bearish, there is some evidence that the bulls are still in charge: continuing higher lows, Bollinger bands are beginning to open, and the MACD just crossed above its signal line. If the bullish trend continues, last week’s high of 41,672 could be a target. If the market reverses, support might be found at the 23.6% Fibonacci retracement level (39,770) and further at the 38.2% Fib level (~38,600).
September E-mini Dow Jones Index futures weekly chart
September British Pound Futures Weekly Chart
September British pound futures closed down for the week, closing below the upper Bollinger band and just a few ticks above the midpoint of the previous week’s candle body. The Bollinger bands are beginning to expand, which could mean a trend to the upside is possible. The pound is trading above its rising 26-week moving average and above the Ichimoku cloud–both are bullish for the pound. The MACD just flashed a bullish cross when 6B was launched off the 26-week moving average. At 61, the RSI has room to go to be considered overbought. If the pound futures continue to rise, look for the highs from July 2023 as an area of stickiness. If this reversal continues, look for support around the 26-week moving average/23.6% Fibonacci retracement level (~1.2540) and further down at the 38.2% Fib level (1.2146).
September British pound futures weekly chart
Companies Reporting Earnings July 22 - 26
Six Dow Jones Index stocks report earnings this week, though three of them (Coca-Cola, Verizon, and Dow Chemical) are in the bottom 20% when factoring in their weight in the index. No. 7 by weight, Visa reports Tuesday afternoon, IBM on Wednesday afternoon and 3M on Friday morning to round out the Dow stocks reporting this week.
YM/MYM futures could see some unsystematic behavior when these companies report. Tech giants Tesla and Google report Tuesday afternoon; while Nasdaq and S&P 500 futures might experience volatility when these companies report. Valero Energy may give us an early look into how energy companies are forecasting oil/gasoline supply and demand for 2024 and 2025. We also get a look inside the forecast for the airline industry with earnings reports from Southwest and American Airlines on Thursday morning.
| Date | Companies Earnings |
|---|---|
| Monday, July 22 | Verizon Communications (VZ): $1.15 EPS Estimate, $33.07B Revenue Estimate (BMO) * |
| Tuesday, July 23 | United Parcel Service, Inc. (UPS): $1.98 EPS Estimate, $22.37B Revenue Estimate (BMO) GE Aerospace (GE): $0.98 EPS Estimate, $8.38B Revenue Estimate (BMO) General Motors Corp. (GM): $2.64 EPS Estimate, $44.94B Revenue Estimate (BMO) Coca-Cola Company (KO): $0.80 EPS Estimate, $11.87B Revenue Estimate (BMO) * Tesla, Inc. (TSLA): $0.59 EPS Estimate, $24.97B Revenue Estimate (AMC) Alphabet Inc. (GOOGL): $1.85 EPS Estimate, $70.55B Revenue Estimate (AMC) Visa Inc (V): $2.41 EPS Estimate, $8.91B Revenue Estimate (AMC) * |
| Wednesday, July 24 | AT&T Corp. (T): $0.58 EPS Estimate, $30.23B Revenue Estimate (BMO) Ford Motor Company (F): $0.62 EPS Estimate, $41.65B Revenue Estimate (AMC) International Business Machines Corp. (IBM): $2.16 EPS Estimate, $15.58B Revenue Estimate (AMC) * |
| Thursday, July 25 | American Airlines Group, Inc. (AAL): $1.04 EPS Estimate, $14.49B Revenue Estimate (BMO) Southwest Airlines Co. (LUV): $0.51 EPS Estimate, $7.35B Revenue Estimate (BMO) Valero Energy Corp. (VLO): $3.03 EPS Estimate, $34.82B Revenue Estimate (BMO) Dow Chemical Co. (DOW): $0.72 EPS Estimate, $11.00B Revenue Estimate (BMO) * |
| Friday, July 26 | 3M Company (MMM): $1.66 EPS Estimate, $5.89B Revenue Estimate (BMO) * |
* indicates that this company is in the Dow Jones Index
Economic Reports for the week of July 22 - 26
This week’ news releases will be relatively light, but some very important information that could influence the FOMC’s decision-making process arrives toward the end of the week. Thursday morning, in addition to the usual Jobless Claims report (forecast: 239k jobs lost vs. 243k the previous week), the first Q2 GDP report will be released. The forecast for this report is 1.9%, which is slightly higher than Q1’s 1.4%.
Also available at the same time are Wholesale and Retail Inventories, and Durable Goods Orders. These are numbers that can tell us how well the economy is setting up for the near future (in contrast to the GDP number, which is backward-looking). Personal Consumption and Expenditures arrives at 8:30 AM Friday, with the month-over-month core PCE forecast to rise 0.2% (compared to 0.1% for the previous month).
This is key because this is the preferred inflation number that the FOMC uses to guide their policy decisions. Consumer Sentiment from the University of Michigan later that morning also has an inflation expectation component, which could move the markets. Don’t expect much from Fed speakers as they enter the quiet period leading up to the July 31 meeting—though Secretary of the Treasury Janet Yellen has been known to speak during this time and can influence market behavior.
| Date | Economic Reports |
|---|---|
| Monday, July 22 | 8:30 AM ET: Chicago Fed National Activity Index 11:00 AM ET: Export Inspections 4:00 PM ET: Crop Progress |
| Tuesday, July 23 | 10:00 AM ET: Richmond Fed Manufacturing Index 10:00 AM ET: Existing Home Sales 1:00 PM ET: Money Supply 4:30 PM ET: API Weekly Oil Stocks |
| Wednesday, July 24 | 7:00 AM ET: MBA Mortgage Applications 9:45 AM ET: PMI Composite Flash 10:00 AM ET: New Home Sales 10:30 AM ET: EIA Petroleum Status Report 11:00 AM ET: Survey of Business Uncertainty |
| Thursday, July 25 | 8:30 AM ET: Jobless Claims 8:30 AM ET: GDP 8:30 AM ET: Wholesale Inventories (Advance) 8:30 AM ET: Retail Inventories (Advance) 8:30 AM ET: Durable Goods Orders 8:30 AM ET: International Trade in Goods (Advance) 8:30 AM ET: Export Sales 10:30 AM ET: EIA Natural Gas Report 11:00 AM ET: Kansas City Fed Manufacturing Index 3:00 PM ET: Cold Storage 4:30 PM ET: Fed Balance Sheet |
| Friday, July 26 | 8:30 AM ET: Personal Income and Outlays 10:00 AM ET: Consumer Sentiment 1:00 PM ET: Baker Hughes Rig Count |
*** Market Moving Indicators
* Merit Extra Attention
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