US market in search of growth drivers

 

On August 2, American stock markets showed mixed dynamics. The S&P 500 fell 0.18% to 4387 points, the Nasdaq climbed 0.06% and the Dow Jones slipped 0.28%. Utilities (+ 0.74%), cyclical consumer goods (+ 0.28%) outperformed the market due to strengthening quotations of clothing and car manufacturers, as well as the health sector (+ 0.17%). Among the outsiders were representatives of the industry of raw materials and materials (-1.17%) because of weak indicators of metallurgists and gold miners, industry (-0.72%), and energy (-0.71%).

Square (SQ: + 10.2%) is gaining Australian Fintech company Afterpay (APT-AU) for $ 29 billion in shares, which could strengthen Square's position against PayPal (PYPL).

Ferrari (RACE: -2.8%) posted a second-quarter report above market expectations, but management's full-year outlook remained below consensus worried investors.

Foot Locker (FL: -2.1%) will gain apparel brands Atmos for $ 360 million and WSS for $ 750 million in cash. The market is concerned about the possibility of a decrease in the volume of share buybacks.

Today, global stock markets are showing mixed performance. Investors' attention is focused on the Fed's comments on the possible winding up of the QE program. On the eve, speaking on CNBC, Christopher Waller, a member of the Fed's Board of Governors, said that the regulator could announce the tightening of monetary policy in September and cut purchases from October this year. It was also noted that this decision will largely depend on the next two reports on wages in the United States, the nearest of which will be released on August 6.

Investors are also focused on negotiations on infrastructure projects. Amendments are already being made to the bipartisan program, and discussions on the $ 3.5 billion package are still ongoing since such a large-scale project has not yet met with support even from most Democrats. If the market is likely to react positively to the adoption of the first of the two proposals, the Democratic bill is worrying investors about increases in corporate taxes and taxes for wealthy Americans.

The season of corporate reports signals that in the first and second quarters of this year, companies have reached their peak indicators, which are likely to be followed by a decline. Issuers are increasingly making moderate forecasts for the second half of the year.

Asian stock markets closed mostly in the red. The Hong Kong Hang Seng sank 0.48%, the Chinese CSI 300 added a modest 0.01%, and the Japanese Nikkei 225 fell 0.5%. EuroStoxx 50 is up 0.1%.

Appetite for risk is uncertain. The yield on 10-year Treasuries fell to 1.17%. The price of Brent futures fell to $ 73 per barrel. Gold is trading near $ 1,812 per troy ounce.

The upcoming S&P 500 session will be held between 4370-4420 points.

Today the publication of significant macro-statistics is not expected.

Major game developer Activision Blizzard (ATVI) is to publish quarterly results today. According to the consensus forecast, revenue may decline by 9-10% YoY due to a high base for the same period in 2020 amid the pandemic. As a result, the normalization of gaming activity is quite expected. Adjusted EPS, according to general market expectations, will be $ 0.76 versus $ 0.97 a year earlier. Investors focus on the scandalous story of sexual harassment in the company and other employee complaints about corporate culture. It will be important for market players to get an answer to the question of how employee boycotts will affect the game release plan, since, according to media reports, work on some projects has been suspended.

The Freedom Finance Sentiment Index fell to 51, reflecting continued concerns over the pace of economic recovery following the COVID-19 pandemic.

Technically, the S&P 500 is continuing its long-term uptrend. The day before, the broad market index continued its consolidation, which began last week. The RSI indicator is still forming a triple bearish divergence, while the MACD indicator has moved into negative territory again. The threat of a short-term correction remains, but for the negative signal to materialize, the broad market index should fall below the support level at 4370 points. However, as long as this level is held by the "bulls, ", the tendency of the benchmark to rise may persist.