Dow Futures Falls Just 10 Pts; ISM Manufacturing PMI Data Due

Dow Futures

DOW JONES is trading flat at 32805.00

U.S. stocks are seen opening marginally lower Monday, handing back some of the recent gains ahead of the release of more corporate earnings and the key monthly employment report.

At 7 AM ET (1100 GMT), the Dow Futures contract was down 10 points or 0.1%, S&P 500 Futures traded 10 points or 0.2% lower, and Nasdaq 100 Futures dropped 20 points or 0.2%.

The new month is set to start on a slightly negative note, as investors consolidate after the best month of the year so far. The Dow Jones Industrial Average gained 6.7% in July, the S&P 500 gained just over 9.1%, while the Nasdaq climbed over 12%, all three averages recording their biggest monthly gains since 2020.

Second quarter U.S. corporate results have mostly been stronger than expected. Of the 56% of S&P 500 companies that have reported earnings so far, more than half have beaten analyst estimates, according to analysts at Goldman Sachs, above the long-term average of 47%.

That said, the rate of earnings beats is below the 62% average pace set in the last five quarters, Goldman added, suggesting there could still be further downside.

Aside from the generally upbeat corporate news, speculation that the Fed may not need to tighten as aggressively as some had feared, in the wake of data showing the U.S. economy contracted for the second quarter in a row, has helped the tone.

This means Friday’s monthly employment report will be even more highly anticipated than usual. The report is expected to show that the labour market remains robust, with 250,000 jobs added in July, despite the recent barrage of Fed rate hikes.

On technical fronts DOW JONES RSI stood at 69.06 and currently it is trading above all MA. So, BUY position can be taken with following target and stoploss:

TRADE SIGNAL – : DOW JONES – BUY: 32813.00, TARGET: 33200.00, STOP LOSS: 32595.00

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