Stock Market Outlook for Fri Aug 2 2024 – All About The July Non-Farm Payroll Report

Prior Trading Day Summary:

On Thursday stocks opened substantially higher but the Weekly Initial Unemployment Insurance Claims came in far higher than expected at 249,000 which spooked many investors into thinking September will be too late for an interest rate cut. By then the economy could already be heading into a recession. Many analysts commented that the Fed was too late with the first rate cut and investors commenced selling. By the close some of the drop had been recovered but the losses were still huge and wiped out the prior day’s gains.

The SPX had risen 86 points on Wednesday but gave back 75 points on Thursday. It closed at 5446.

The NASDAQ had risen 452 points on Wednesday but gave back 405 points on Thursday. It closed at 17,194.

With the Fed induced rally ended, the focus now shifts to the morning July non-farm payroll numbers due out today at 8:30.

Let’s review the closing technical indicators from Thu Aug 1 2024 to see what the signals advise to expect on Fri Aug 2 2024.

Stock Market Outlook: SPX Closing Chart For Thu Aug 1 2024

The index reached just above the 21 day in the early morning rally and then, as you can see in the chart, the index collapsed to below the 50 day before it managed to recover slightly to end the day at the 50 day moving average.  This is bearish.

The closing candlestick has two long shadows which indicates a potential bounce to start the day on Friday but a lower close to end the day.

The 21 day moving average is falling which is bearish.

The 50 day moving average is slowing its climb which is bearish.

The 200 day moving average is still climbing. The 200 day is at 5066 which is bullish and the 100 day is also climbing to 5305 but its rise is starting to slow.

The Lower Bollinger Band is below the 50 day moving average and falling which is bearish. The Upper Bollinger Band is turning higher which signals a a higher close is possible.

The S&P chart is more bearish than bullish but does signal a chance for a bounce attempt.

SPX Stock Market Outlook review of Thu Aug 1 2024

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Fri Aug 2 2024 

For Friday the jobs numbers will impact the market direction to start the day. After that the technical indicators may control market movement and right now they are signaling more downside should be expected.

Potential Economic and Political Market Moving Events

Monday:

No events scheduled.

Tuesday:

9:00 Case-Shiller home price index fell to 6.8% as expected

10:00 Consumer Confidence came in stronger at 100.3

10:00 Job openings rose to 8.18 million

Wednesday:

8:15 ADP employment report was expected to show 150,000 openings but showed just 122,000

10:00 Pending home sales were expected to rise to 1% but jumped to 4.8%

2:00 FOMC interest rate decision kept rates unchanged

2:30 Fed Chair Powell’s news conference boosted stocks

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims rose unexpectedly to 249,000

8:30 Productivity was expected to come in at 1.8% but came in at 2.3%

9:45 Manufacturing PMI for July came in as expected at 49.5

10:00 ISM manufacturing for July came in as expected at 48.9%

10:00 Construction spending for June came in as expected at 0.2%

Friday:

8:30 July non-farm payrolls are expected to come in lower at 185,000

8:30 Unemployment rate is expected to stay unchanged at 4.1%

8:30 Hourly wages is expected to be unchanged at 0.3%

10:00 Factory orders are expected to slip to -3.2% from -0.5%