Dow suffers slightly for the week, focus shifts to tomorrow’s retail data

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US data late last week showed job openings out of the Bureau of Labor Statistics still at the highs with 10.44 million unfilled and quits at a record high for September, preliminary consumer sentiment according to UoM dropping to a ten-year low at 66.8 from 71.7 prior with preliminary inflation expectations rising 4.9% in the year ahead. The five-year outlook at 2.9%, consumer expectations and current conditions both suffering. The attention in terms of data was more on what preceded it, with financial markets (thus far) generally shrugging off hotter pricing figures last Wednesday that showed year-on-year at 6.2%, producer prices remaining higher though that spread was far greater when it came to Chinese figures, an open question of whether it will translate into higher consumer prices both on the domestic Chinese front as well as the rest of the world given its status as a global manufacturing hub and where (according to its trade figures) have only been rising.

As for coronavirus, well past a quarter of a billion, deaths above 5.1 million, average cases somewhat unchanged in the US after trending lower for most of October.

As for the week ahead, it’s expected to remain busy as Congress returns to work on the $1.75 trillion bill (there’s also the government funding and debt ceiling deadline in early December to brace for), a ceremony planned for today for the $1 trillion infrastructure bill, though its effects will likely take months before being felt.

A virtual summit between the US and Chinese leadership is also expected today. It was relatively uneventful on the US earnings front with few big names on offer, and for this week there will be a few retail giants reporting including Walmart and Home Depot Inc (All Sessions) on Tuesday, both components of this index.

For the US, retail sales tomorrow alongside earnings from retail giants means it’ll take the attention early on, import prices likely to be noted as well, a popular measure of global shipping rates (BDI) showing big retreat for the month of October. Housing data will be on offer on Wednesday, the usual unemployment claims on Thursday, and it’s relatively quiet thereafter with the weekly rig count data out of Baker Hughes Company.

It also remains quiet in terms of central bank action for the majors with more speak on offer from members of the US Federal Reserve (Fed). There’s also the possibility of an announcement soon regarding the Fed Chair, U.S. President Biden in an unconfirmed report weighing between Powell and Brainard.

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Dow technical analysis, overview, strategies, and levels

As for Wall StreetWall Street, a lack of a play both for the weekly as prices failed to reach longer-term levels, as well as on the daily late last week as price action was limited, the technical overview unchanged for both time frames of a heavily stalling bull trend that has offered little if any upside momentum past key levels, the technical boxes nearly all neutral on the daily.

3M Co (All Sessions) and Apple Inc outperformed amongst its components by the close last Friday, Johnson & Johnson (All Sessions) finishing higher after its announcement that it plans to split its company into two publicly traded companies, the minority in the red led by Walt Disney Co (All Sessions) and IBM Corp (All Sessions).

IG client* and CoT** sentiment for the Dow

In sentiment, Commitment of Traders figures haven’t been updated out of the CFTC just yet and as a result the slight buy bias is as of the week before’s report. For retail traders the numbers have been updated, and the pullback in price was just what some needed to unwind some fresh shorts, extreme sell 78% at the start of last week plummeting to 63% at the start of this week.

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.}