Dow little changed ahead of Jackson Hole

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US economic data showed durables failing to grow for July with increases when excluding transportation and defence of 0.3% and 1.2% respectively, and so too for non-defence capital goods orders by 0.4%. As for housing, MBA's weekly mortgage applications showed another drop though this time by a smaller 1.2%, and pending home sales contracted by a smaller than expected -1% m/m and -19.9% y/y.

Risk appetite was little changed in the stock market for the session after what had been consecutive declines, and over in the bond market yields were in for a climb, and in real terms rose more on the further end of the curve but maximum by a few basis points.

Breakeven inflation rates and the 5y/5y forward inflation expectation increased, and market pricing of the US Federal Reserve’s (Fed) rate hike next month is still slightly majority on 75bp (basis points).

However, that could all change with what’s on offer tomorrow, not just on pricing data but on central bank speak with Fed Chairman Powell at Jackson Hole. The economic data on offer today include the weekly unemployment claims and preliminary GDP (Gross Domestic Product).

Dow Technical analysis, overview, strategies, and levels

As with plenty of other key indices, yesterday's session lacked a play, and here too failed to reach its previous daily 1st levels and in turn failing just yet to shift what is a heavily stalling bull trend in the shorter-term time frame that hardly needs much to shift and can easily be viewed as consolidatory, or for those expecting it to remain closer to an average matching the weekly's 'consolidation - volatile' technical overview.

Salesforce and Boeing outperformed amongst its components by the close, but the former dropped in after-hours following the release of its figures that although bested on earnings and revenue, came with a disappointing forecast for its fiscal '23 year. In all, every US sector finished yesterday's session in the green, but energy aside and the gains were sub-1%, and smallest for tech while mediocre for communication and discretionary.

IG client* and CoT** sentiment for the Dow

In sentiment, it’s still majority short amongst retail traders but has dropped since yesterday to 58%, and nearly matching CoT speculators according to last Friday’s report that also showed sell bias dropping from 62% the week before to 57% as of last Tuesday.

Dow chart with retail and institutional sentiment

*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am for the outer circle. Inner circle is from the previous trading day.
**CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.