Wall Street’s index of the 30 largest stocks could break out with the latest economic data.
US30: Weekly Chart
The US30 has been testing resistance at the 34,400 level, and the prolonged failure to get above that would make a breakout even more important.
The index would look to the all-time highs at the 36,970 level, and some short squeeze moves could be the initial catalyst as short sellers get pushed out of the market.
Analysts expect US retail sales to come in higher at 0.5% after last month’s 0.3%.
Retail sales are an important measure in the consumer-driven economy, and without a 2.8% spike in January with new year’s bargains, the monthly gain has failed to get above 1% over the last year. That included five months of negative sales, and February and March this year were both below zero.
Analysts will be looking to see if consumers still have an appetite for retail purchases after the Federal Reserve has hiked interest rates aggressively. Amazon still did well with its Prime Day sales bonanza. Figures were lower than the past two years but still produced the biggest retail sales day of the year in the US. That could add to a good mood in retail if the June number is impressive.
Recent consumer CPI inflation numbers have been falling, and that could give consumers a psychological boost as the likelihood increases that the Federal Reserve is done with rate hikes.
Traders see two more rate hikes this year from the Fed, but the signal is there that the squeeze is over.
Last week also saw Joe Biden wipe out student debt worth $39 billion, and that could ease the pressure further on consumers. A recent Morgan Stanley survey said that consumers were fearful of a student debt restart over their financial goals for the year.
The economic data ends this week for the US after retail sales, with only building permits to follow. A boost from retail sales could carry the market higher, while there are also further earnings from Wall Street banks.
