In this week’s coverage, we analyze the bullish continuation in Japanese yen futures, and the extended drop in the E-mini Russell 2000 futures. We also examine the economic reports and earnings announcements expected next week.
Commentary and charts reflect data at the time of writing (Friday, August 9 at 2 PM ET), and market conditions may change by the publication of this analysis.
September E-mini Russell 2000 Index Futures Weekly Chart
September E-mini Russell 2000 Index futures rallied on Thursday to offset Monday’s bearish move, resulting in a weekly candle that looks like a bullish hammer formation–a small body with a long (buyers) wick on the bottom. This kept the Russell above the VWAP anchored to the beginning of the year. The Russell also remained above the supportive trendline found by connecting the lows in April and June. The MACD histogram is about to cross below zero, which would be a bearish indication. The RSI is right at 50–a neutral reading that appears to be in line with price. Should support hold and this market gets a lift, expect some resistance at the 23.6% Fib retracement level (2,175). If support is taken out, look for lower support at the 50% Fib level (2,012) which is reinforced by the top of the bullish Ichimoku cloud.
September E-mini Russell 2000 Index futures weekly chart
September Japanese Yen Futures Weekly Chart
September Japanese yen futures ended the week down slightly, though the fifth consecutive week of higher highs and higher lows are consistent with a bullish trend. Last week’s high of 0.0071035 broke through the upper Bollinger band (using a 26-week moving average), which neared the 38.2% Fib retracement level of the downtrend that began in January 2023, and just short of the 76.4% Fib level of the more recent downtrend. The MACD histogram is positive and increasing, suggesting bullishness. RSI is trading in conjunction with price and remains above 50 for just the second week in 2024. If the bullish trend extends, look for resistance at the 61.8% Fib level of the recent downtrend (0.0069525) and further up at the bottom of the Ichimoku cloud (~0.0071200). If this market reverses, support might be found at the 23.6% Fib level of the recent downtrend (0.0065130) which would also complement the bullish candle from two weeks prior.
September Japanese yen futures weekly chart
Companies Reporting Earnings August 12 – 16
While the majority of the companies reporting earnings this week are small caps, some notable earnings reports are on tap. Three Dow Jones companies report: Home Depot on Tuesday morning, Cisco Systems on Wednesday afternoon, and Walmart on Thursday morning. This may explain volatility in the YM and MYM futures when these companies report.
In addition to Home Depot and Walmart, Alibaba and JD.com might inform us of the state of retail and its possible effects on the economy heading into the end of the year. Barrick Gold Corp, the second largest gold miner in the world, reports Monday morning and gold futures traders should pay attention to their gold outlook for 2024-25. Applied Materials on Thursday afternoon might provide a look into the health of the semiconductor market (S&P 500 and Nasdaq traders, be aware).
| Date | Companies Earnings |
|---|---|
| Monday, August 12 | Barrick Gold Corporation (GOLD): $0.26 EPS Estimate, $3.02B Revenue Estimate (BMO) |
| Tuesday, August 13 | Home Depot, Inc. (HD): $4.56 EPS Estimate, $42.58B Revenue Estimate (BMO) * |
| Wednesday, August 14 | Dole plc (DOLE): $0.41 EPS Estimate, $2.10B Revenue Estimate (BMO) Cisco Systems, Inc. (OXY): $0.85 EPS Estimate, $13.51B Revenue Estimate (AMC) * |
| Thursday, August 15 | Walmart Inc. (WMT): $0.65 EPS Estimate, $168.40B Revenue Estimate (BMO) * Alibaba Group Holding Ltd. (BABA): $1.87 EPS Estimate, $34.95B Revenue Estimate (BMO) JD.com, Inc. (JD): $0.85 EPS Estimate, $40.12B Revenue Estimate (BMO) Deere & Company (DE): $5.85 EPS Estimate, $10.89B Revenue Estimate (BMO) Applied Materials, Inc. (AMAT): $2.01 EPS Estimate, $6.67B Revenue Estimate (AMC) |
| Friday, August 16 | N/A |
* indicates that this company is in the Dow Jones Index
Economic Reports for the week of August 12 - 16
This week begins with a bang for the agriculture markets as the World Agriculture Supply and Demand Estimates (WASDE) report for corn, wheat, soybeans, cotton, and more arrives at noon. Inflation information grabs the spotlight on Tuesday and Wednesday, as Producer Price Index (PPI) arrives Tuesday morning and Consumer Price Index (CPI) is released Wednesday morning.
With year-over-year CPI expected to remain unchanged at 3%, any deviation from expectations could introduce volatility in the stock index and treasury futures markets. Thursday morning at 8:30 will see a plethora of economic reports: Jobless Claims, Retail Sales, Empire State and Philly Fed Manufacturing indices, and Import/Export Prices.
Business inventories and the Housing Market Index at 10 AM will round out the major reports. On Friday morning we’ll see more housing information (Starts and Permits) and consumer confidence at 10 AM could be a market mover. Federal Reserve Bank Presidents Bostic, Harker, Goolsbee and Musalem are on the docket this week, but be aware that Fed members can speak unannounced at any time.
| Date | Economic Reports |
|---|---|
| Monday, August 12 | 11:00 AM ET: Export Inspections 12:00 PM ET: USDA Supply Demand - Corn, Wheat, Soybean, Cotton *** 12:00 PM ET: Crop Production *** 4:00 PM ET: Treasury Statement 4:00 PM ET: Crop Progress |
| Tuesday, August 13 | 6:00 AM ET: NFIB Small Business Optimism Index 8:30 AM ET: PPI-Final Demand *** 1:15 PM ET: Atlanta Fed Bank President Raphael Bostic Speaks 4:30 PM ET: API Weekly Oil Stocks |
| Wednesday, August 14 | 7:00 AM ET: MBA Mortgage Applications 8:30 AM ET: CPI *** 10:30 AM ET: EIA Petroleum Status Report * |
| Thursday, August 15 | 8:30 AM ET: Jobless Claims *** 8:30 AM ET: Empire State Manufacturing Index * 8:30 AM ET: Philadelphia Fed Manufacturing Index * 8:30 AM ET: Retail Sales *** 8:30 AM ET: Import and Export Prices 8:30 AM ET: Export Sales 9:10 AM ET: St. Louis Fed Bank President Alberto Musalem 9:15 AM ET: Industrial Production 10:00 AM ET: Business Inventories 10:00 AM ET: Housing Market Index 10:30 AM ET: EIA Natural Gas Report 1:10 PM ET: Philadelphia Fed Bank President Patrick Harker Speaks 4:00 PM ET: Treasury International Capital 4:30 PM ET: Fed Balance Sheet |
| Friday, August 16 | 8:30 AM ET: Housing Starts and Permits * 10:00 AM ET: Consumer Sentiment * 1:00 PM ET: Baker Hughes Rig Count 1:25 PM ET: Chicago Fed Bank President Austan Goolsbee |
*** Market Moving Indicators
* Merit Extra Attention
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