Technology sector loses ground
BY Janne Muta|July 20, 2023
Dow continued to rise but lost some momentum yesterday. Early on in the trading day, the positive momentum was fueled by strong bank results and a decrease in inflation globally. Regional banks reported stabilized deposits in the second quarter, easing concerns about loan accessibility. Later in the New York session sellers pushed equities lower, with Nasdaq losing the most. This could result in weakness in the S&P 500 index. USD continues to trade sideways while yields continue to slip lower, supporting gold.
Despite a significant decline in quarterly profit, Goldman Sachs shares gained 0.97% while the financial sector as a whole added 0.43%. Technology sectors shed 0.25% with the Nasdaq index losing 0.05%. Nasdaq futures have since traded lower by 0.5% in the Asian session.
The quarterly earnings announcements dominate the stage as the major US banks have kicked off the earnings season on a positive note. Goldman Sachs disappointed yesterday but investors were still bidding the stock higher. However, technology and consumer companies have been the driving force behind this year's market rally and will soon take centre stage.
Gold remains bullish above 1970 and could trade to 1998. Below 1970, look for a move to 1965.
USDCAD is bearish below 1.3243 and could trade down to 1.3094. Above the level, look for a move to 1.3280.
S&P 500 has rallied 20% since the March low. In the latest 10 day push the market has rallied over 4%. The risk is that that the market becomes overextended and vulnerable to corrections. It is, however, still in uptrend with the nearest key support levels at 4500 and 4530. A decisive break below those levels, could move the market down to 44700.
CHFJPY is bullish above 160.67. Below the level the market could move to 160.20. The nearest key price levels are 169.80 and 162.30.
The Next Main Risk Events
- USD - Unemployment Claims
- USD - Philly Fed Manufacturing Index
- USD - Existing Home Sales
- GBP - Retail Sales
- CAD - Retail Sales
For more information and details see the TIOmarkets economic calendar.
Chief Market Analyst
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Janne Muta is a seasoned market analyst and trading educator with a M.Sc. in Finance. His strategies integrate macroeconomics with technical analysis and he shares his knowledge with the trading community.
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