After weakness in data, the market is waiting for FED Minutes!

Markt is quiet and confused! 

Market analyst – IFC Markets

As much as we are getting closer to FED minutes to be published, the market reacts more cautiously and brings more calm to see what policymakers think and then respond based on that. 

Kerry Craig, global market strategist at JPMorgan: “Investors are trying to balance the reopening of economies as vaccination rates go up, but also seeing the effects of the spreading Delta variant and that’s being reflected in the slowing economic data most of which has been surprising on the downside in the last two weeks,”

Monday this week, we had weaker than expected Chinese retail sales and industrial production, after last Friday’s discount report of Michigan university about US consumer Sentiment and Expectations. Yesterday also we had amazingly surprise in the Us retail sales. Let’s go to the more US retail sales data. 

According to the report released by the US Census Bureau, Auto and parts sales decreased by 3.9%. Other business types that were subsequently negatively impacted were non-store retailers -3.1%, clothing and accessories Stores in the next level by -2.6%, sporting goods, musical instrument stores, and book-sellers were down by -1.9%. Building materials, garden equipment, and consumables distributors lost -1.2% in their sales. Retail and food services decreased -1.1%, food and beverage stores dow by -1.1%, furniture and home furnishing stores lowered -0.6%, and grocery stores decreased by -0.1%. Conversely, with the gradual removal of restrictions, consumer spending began to shift to the service sector. As we can see in the report, gas station sales increased by 2.4% in response to the increase in travel demand, catering services, and drinking establishments also recorded an increase of 1.7%, and electronic and electrical stores, health and personal care stores recorded increases respectively. 0.3% and 0.1%.

Today also, we had Housing data. According to the published data, new building permits issued by the government in July increase to 1.635M, but Housing start with a -0.7% decrease fell to 1.534M. Mixed data, which is not that much in favor of stock markets. 

As a reaction in the stock markets, Dow Jones Futures decrease 0.21% so far today. Overall, market sentiment is not favorable, and this adverse reaction can be seen in the chart. RSI at 43 and OBV trend line also is decreasing. Candles with creating lower highs, forming way under Parabolic SAR dots in the H4 chart, signaling that we can expect the correction from these levels in the mid-term. 35082 and 34970 are the following supports. 

Dow Jones futures

Risk Warning: Trading-Leveraged Products such as Forex and Derivatives may not be suitable for all investors as they carry a high degree of risk to your capital. Please ensure that you fully understand the risks involved, considering your investment objectives and level of experience, before trading, and if necessary, seek independent advice.

Related post