The Dow Jones Industrial Average recently reached a new all-time high of 40,346.22 on Monday, sparking investor optimism. The market is currently focused on the Federal Reserve’s potential rate cuts, with a 98% chance of a rate cut in September according to CME’s FedWatch Tool. Fed Chairman Jerome Powell’s recent comments on inflation data have increased hopes for a rate cut as early as July.
Despite a recent uptick in Producer Price Index (PPI) wholesale inflation, the market remains hopeful for rate cuts following a decline in Consumer Price Index (CPI) inflation. Investors are now waiting for the US Retail Sales data for June, expecting it to remain flat at 0.0% compared to the previous month.
In terms of individual securities, Caterpillar Inc. saw a 3% increase in share price, while Nike Inc. experienced a 2.2% decline. Nike shares have fallen sharply since last December following lower forward guidance in its latest earnings report. The Dow Jones index remains near the 40,200.00 handle after setting a new record high, holding above the 200-day Exponential Moving Average (EMA).
The Dow Jones has been bullish since breaking above the 200-day EMA in November and is up nearly 20% from last October’s lows. The market is closely monitoring the Retail Sales data as an indicator of consumer spending, a key driver of the US economy. A high reading on Retail Sales is typically seen as bullish for the US Dollar, while a low reading is considered bearish. The next Retail Sales data release is scheduled for Tuesday, July 16th.
