NASDAQ Composite (.IXIC) focus on the data particularly around retail sales and consumer confidence
As President Donald Trump prepares to slap new tariffs on Chinese imports, investors are bracing for signs of pressure on U.S. consumers as top retailers begin reporting quarterly results next week and key consumer sentiment and retail sales data is released.
Investors and analysts are anxious about the impact of Trump’s planned 10% tariff on the remaining $300 billion in Chinese imports, which will largely affect consumer goods, unlike the previous round that fell heavily on industrial and business products. That could be a double-whammy for the U.S. economy, which is about 70 percent driven by consumers, and retailers.
“We’ll be watching the data particularly around retail sales and consumer confidence,” Mahajan said. “We’ll continue to monitor the softening in manufacturing and inflation as well, but more important for the U.S. economic picture is the consumer right now.”
July retail sales data is due out on Thursday. Excluding autos, sales are expected to have grown 0.3% compared with 0.4% in June, according to a Reuters poll. On Friday, The University of Michigan’s preliminary August reading of consumer sentiment is expected to show a slip to 97.7 from 98.4 in July.
The S&P Retail index fell a total of 5.3% in the first three trading sessions following Trump’s Aug. 1 tariff announcement. As of Thursday’s market close, the index was down 1.6% for the month so far.
Retailers reporting next week include Macy’s Inc , Walmart Inc and Tapestry Inc , whose brands include Coach, Kate Spade and Stuart Weitzman. The following week Kohls Corp , Target and Nordstrom Inc will all report.
The S&P Consumer Discretionary index , which includes big retailers, is expected to report a 1.2% increase in second-quarter earnings, according to IBES data from Refinitiv.
But estimates for the rest of the year have been falling. Wall Street now expects third-quarter earnings growth of 1.8% compared with a 6.8% expectation on July 1 while the fourth-quarter estimate has fallen to 6.5% from 9.8%.
Mitigating factors for consumer companies include a strong labor market, low inflation, declining interest rates and low gas prices, according to David Joy, chief market strategist at Ameriprise Financial in Boston.
But Joy cautioned that recent strength in the Conference Board’s Consumer Confidence index may not last.
“When confidence is at these types of levels, it may have peaked and will decline if the economy slows further or the stock market sells off sharply,” he said.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 8,215.81.
The projected lower bound is: 7,718.13.
The projected closing price is: 7,966.97.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 60.9122. This is not an overbought or oversold reading. The last signal was a buy 2 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 44.99. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 47 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -50. This is not a topping or bottoming area. The last signal was a buy 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 16 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -80.016 at 7,959.140. Volume was 2% above average (neutral) and Bollinger Bands were 30% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 8,027.80 8,000.42 7,560.53
Volatility: 29 20 26
Volume: 617,525,696 574,068,864 588,328,832
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
NASDAQ COMPOSITE is currently 5.3% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .IXIC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .IXIC and have had this outlook for the last 6 periods.