Dow Jones Lower Despite Better Than Expected Bank Earnings

dow jones
dow jones

The Dow Jones futures rebound today as U.S. consumer prices rebound in June. The U.S. consumer price index (CPI) rose 0.6% above the expectations of a 0.5% increase. The yearly reading for Consumer Price Index (CPI) came in at 0.6% in line with the consensus estimates. The Consumer Price Index excluding Food & Energy registered in at 0.2% topping the forecasts of 0.1%. 

NFIB reported that the small-business optimism index jumped 5.2 points to 100.6, marking the highest level since February 2020, analysts expectations were for a reading of 96.

US Banks Earnings Reports

JPMorgan reported better-than-expected 2Q earnings helped by a 79% increase in trading revenue. The earnings came at $4.69 billion, or $1.38 a share, beating the expectations. Revenue came in at $33 billion also above the $30.3 billion estimates. 

Wells Fargo announced a $2.4 billion loss for the second quarter and cut its dividend to 10 cents per share. Citigroup reported earnings of 50 cents/share, beating the expectations of 0.28 on $19.77 billion of revenue. 

Fear and Greed Index Retreat at 53

The fear and greed index retreated back to 53 points after yesterday’s sharp reversal in Wall Street. Fear and Greed index was at 59 last Friday on hopes of the coronavirus vaccine. One week ago, the index was at 51. A drop below the 50-mark will signal selling pressures as the fear would take control.   

The put/call ratio in CBOE is at 0.46 rebounding from the two years low while the CBOE Volatility Index (VIX) or fear index jumped yesterday 18.07% at 32.22.  

Dow Jones Technical Analysis    

Dow Jones ended 0.04% higher at 26,085 as the recent rebound from the March lows failed to hold above the 200-day moving average. The long term outlook is neutral now for the index, and only a credible close above the 200-day moving average would give the upper hand to the bulls.  

On the upside, the first resistance for the Dow Jones stands at 26,639 the high from yesterday. A move above 26,639 might open the way for a test of 27,321 the high from June 10. If the bulls continue then the next supply zone for the Dow Jones is at 27,598 the high from June 8. 

On the other side, the first support for Dow Jones index is at 26,044 the low from yesterday’s trading session. Next support for the Dow index will be met at 25,633 the low from July 10. A break below 25,633 might challenge the 25,329 the 50-day moving average.   

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