The S&P 500 broad market index futures
experienced a notable decline of 1.3%, falling to 5437 points, marking the
lowest level since June 14. This downward trend resumed on July 23, triggered
by disappointing Q2 earnings reports from Alphabet (GOOG) and Tesla (TSLA).
Tesla's profits hit a five-year low with an EPS of $0.52 versus the expected
$0.61, leading to a 10.6% drop in its stock. Alphabet, despite exceeding
revenue and EPS expectations, saw a 7.7% decline in stock price due to low
revenue growth in YouTube advertising. This disappointing trend in tech
earnings was set earlier by Netflix (NFLX).
The S&P 500 futures have dropped 4.9% from
their all-time high, approaching a standard correction range of 5.0-7.0%. Large
investors have increased their positions, with the SPDR S&P 500 ETF Trust
(SPY) reporting net inflows of $9.9 billion last week and $1.2 billion this
week. Despite this, the correction might not be over, as the index has entered
a downside pattern with primary targets at 5200-5300 points. Immediate
resistance is at 5470-5490 points, with support at 5370-5390 points. A
correction signal has appeared at 5511 points.
Economic indicators show a mixed picture. The
U.S. Q2 GDP expanded by 2.8% QoQ, above the expected 2.0%. Surprisingly, the
GDP Price index dropped to 2.3% QoQ compared to the 2.6% consensus, reducing
inflationary risks. This development pushed the S&P 500 index futures up on
Friday ahead of the June PCE Price index release. Wall Street expects mixed
numbers with decreasing annual figures and rising monthly readings, which may
further inflate negative sentiment in the market. If inflation decreases above
expectations, the stock market might continue recovering.
Next week will be crucial with the Federal
Reserve (Fed), Bank of Japan, and Bank of England holding their meetings. More
U.S. Big Tech giants will be reporting, providing the last chance for the
sector to improve market sentiment.
In the commodities market, Brent crude prices
dropped to test the support at $80.00-82.00 per barrel, rebounding slightly. If
this support is breached, prices may fall further towards $77.00-72.00 per
barrel, with a favorable period for declining oil prices expected to last for
another week.
Gold prices, having reached mid-term targets
of $2000-2100 per troy ounce, are now targeting $2400-2500. However, a crucial
support at $2390-2410 per ounce was breached. If prices fail to recover, they
may decline to $2300-2320. Further drops could activate a downside scenario
targeting $2200 per ounce.
The EURUSD is retesting the support at
1.08100-1.08400, a pivotal point for decision-making. The pair has a higher
chance of rising towards 1.10000 than declining to 1.05000. If it fails to
rebound from the support before the Fed meeting, it will likely update its lows
before reversing to the upside.