US30 Futures Index Rises To A One-Week High Amid Debt-Ceiling Optimism And Fresh Round Of Solid US Macro-Data
- The US30 futures index rises to a one-week high amid a generally positive mood around wall street
- A combination of factors assists the US30 futures index to extend the overnight gains hence settling firmly above 33500.00s
- U30 Index is boosted by solid gains from stocks in the Information Technology and Consumer Discretionary sectors while weighed a little bit down by stocks in the Consumer and Health Care sectors
The Dow Jones futures index edged higher on Friday during the Asian session to extend the overnight trading gains amid a stronger round of US macrodata, a better-than-expected Walmart sales report, and general optimism that a possible deal to raise the nation’s debt ceiling could be reached before the end of the week.
As per press time, futures tied to the Dow Jones added 0.15%/50 points to trade at $33591.0, while its counterparts, Nas 100 futures and S&P 500 futures, all gained 0.23% and 0.12% to trade at $13884.0 and 4208.06 levels, respectively. The moves follow a winning day on Wall Street as optimism about debt ceiling talks ebbed and flowed while investors also cheered strong U.S economic data reports that calmed fears of a potential recession in the US while further monitoring the Sales outlook released by Walmart on Thursday. Following the positive mood around Wall Street, all three major U.S. stock indexes rose significantly with the S&P 50 and Nasdaq Composite jumping 0.94% and 1.51%, respectively, to hit their highest closing levels since August. The Dow Jones Industrial Average rose more than 115 points or 0.34%.
The two parties in the negotiation about the US debt ceiling made positive progress on Tuesday on how far the U.S Government could raise its debt ceiling, with a possible deal now expected to be reached by the end of the week. If this happens, it will further inspire the current mood on Wall Street.
On the economic data front, an Initial jobless claims data report on Thursday showed the number of Americans last week who had filed for unemployment insurance for the first time had dropped to 242K down from 264K the week earlier and against a market expectation of a 254K drop hence supporting the case for further interest rate hikes by the Fed amid a tight labor market. To a greater extent, the unemployment figures overshadowed a downtick in the number of existing residential buildings that were sold last month. Elsewhere, discount retail giant Walmart Inc (NYSE: WMT) shares rose 1.3% on Thursday after the biggest U.S retailer said first-quarter sales rose 8%, fueled by grocery sales that offset sales of more discretionary items such as electronics and apparel. The giant store went further and hiked its full-year sales forecasts. Additionally, Cisco Systems Inc (NASDAQ: CSCO) shares rose 1.2% after the networking hardware maker reported a drop in orders, a possible harbinger for weaker tech spending as companies brace for tougher economic times.
As we advance, the Dow Jones Average Index is boosted by solid gains from stocks in the Information Technology and Consumer Discretionary sectors, with Intel Inc. (NASDAQ: INTC) and Nike Inc. (NYSE: NKE) stocks being the biggest gainers in their respective sectors, having risen 2.81%/0.81 points and 1.62%/1.89 points, respectively, to trade at $29.68 and $118.87 per share, respectively. The Main index is also weighed down slightly by stocks in the Consumer and Health Care sectors, with Procter & Gamble Plc. (NYSE: PG) and UnitedHealth Group Inc. (NYSE: UNH) stocks being the biggest losers in their respective sectors, having lost 1.64%/2.55 points and 1.15%/5.58 points, respectively, to trade at $152.53 and $479.23 per share, respectively.
Technical Outlook: Four-Hours US30 Futures Index Price Chart
From a technical perspective, a further increase in buying pressure could uplift spot prices toward confronting the 33666.62 resistance level. A breach of this resistance level could pave the way for a short rally toward the 33786.06 resistance level. A subsequent break above this level could pave the way for a northbound rally above the 34000.00 psychological mark toward confronting the May 2023 swing high level of 34625.14. A decisive flip of this resistance level into a support level could pave the way for further gains around the US30 futures index.
On the flip side, if dip-sellers and tactical traders jump back in and trigger a bearish reversal, the price will find support at the buyer congestion zone due to the 200 (yellow), 50 (red), and 20 (blue) days Exponential Moving Averages (EMA) at $33444.88, $33400.67 and $33384.24 levels respectively. If sidelined sellers join in from this buyer congestion zone, it will rejuvenate the bearish momentum, provoking an extended decline beyond the trendline support (bearish price breakout) toward the 33226.86 support level. A four-hour candlestick close below this support level could pave the way for an accelerated decline toward the key support level plotted by a horizontal trendline extending from the early-May swing low. A breach of this key support level could pave the way for an extension of the bearish trajectory beyond the 32928.26 support level.
