ETFsector.com Daily Trading Outlook, August 7, 2024

Buyers finally stepped in to stop the 3-day decline with the major US equity indices all closing higher on Tuesday.  The S&P 500 led up 1.04% while the Nasdaq added 1.03% and the Dow 0.76%.  Small and Mid-Cap. stocks also bounced with the Russell Mid-cap. and Russell 2000 Indices both gaining >1% on the day.  Breadth in the broad market S&P 500 Index was a positive 4:1 but short of a bullish capitulation signal which is a 10:1 upside:downside day on the tape.  International equities found no such relief with the MSCI EAFE and EM Indices down 3.71% and 4.22% respectively.

At the sector level XLRE and XLF led the tape with XLK coming in 3^rd.  This is not a great showing for those hoping for a quick snapback in Tech/Growth shares as investors preferred to shop for near-term outperformers rather than the XLK which has become a YTD laggard.

Away from equities, bond yields rose with the 2yr and 10yr up to 3.97% and 3.89% respectively.  Crude settled lower on the WTI contract at $72.86 while the DXY strengthened, and Commodities prices also firmed marginally with the Bloomberg Commodities Index adding 0.26%.

The economic calendar remains subdued, but Consumer Credit and MBA Mortgage Apps are on deck for Wednesday.  DIS headlines a full slate of earnings as the reporting season starts to wind down.

Eco Data Releases | Wednesday August 7^th, 2024

 S&P 500 Constituent Earnings Announcements by GICS Sector | Wednesday August 7^th, 2024

DIS reports with the chart showing a company in distress as price is on the cusp of violating long-term support to the downside.  Recent eco data releases have highlighted the tenuous position of the US Consumer, and if DIS shows weak results that would be confirmation as well as an end to 4 straight quarters of earnings beats for the stock.

• DIS (200-day m.a. | RSI )
• The $90 level has been the neckline of a longer-term bottoming pattern since 2022. A downside violation would project to a retest of $50

Sources: Bloomberg