Following yesterday’s selloffs in equity futures, the markets are recovering nicely.  The Nasdaq is down slightly as we type, but the Dow (+418), Russell (+37.70), and S&P (+32.75) have all recouped all of yesterday’s losses.  Plummeting yields, renewed Coronavirus fears, and potential government crackdowns on banks and big tech were largely to blame for the yesterday’s selling.  All of those concerns seem to have been forgotten as we head into the weekend, but it is fair to argue that we’ll need some more bullish news for this rally to continue.  The Fed on Wednesday expressed some concern about the pace at which the economy is recovering.  Much of that can be attributed to labor shortages and supply disruptions.  Labor shortages should begin to correct as benefits expire, but the supply disruptions will likely take a while to get back up to speed. 

Next week’s news slate is relatively light, but we’ll get a few gauges on inflation with CPI and PPI coming out Tuesday and Wednesday, respectively.  It should however be noted that the Fed cares much more about PCE, which won’t be announced until the 30th.  We’ll also have a two-day FOMC meeting that last week of July, and traders will be anxious to see if any more FOMC members have shifted towards tapering sooner rather than later. 

E-mini S&P 500 120 Min Chart
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Bill Dixon

Senior Market Strategist
Bill began his career working with a firm of technical commodity traders specializing in the treasury and metal markets. In 2006 he moved over to Lind-Waldock as a broker. Bill joined RJO Futures in 2011.
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