Dow Jones, S&P 500, and Nasdaq continue to trade at record highs

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Jul 12, 2021
  • Investors are not worried that the U.S. economy could be hit by the fast-spreading Delta variant of the corona
  • The focus of investors will turn on the second-quarter earnings season
  • The U.S. will release June inflation figures and the usual employment-related numbers this week

The three major U.S. stock indexes continue to trade at record highs despite the concerns that the recovery in the U.S. economy could be hit by the fast-spreading Delta variant of the coronavirus. Delta is now the dominant variant in the United States and accounts for more than 50% of positive COVID-19 samples, which signals that the battle against the coronavirus continues.

“As more people are infected, the range of mutations widens, though the vast majority of them go nowhere and don’t affect anything. But every now and then, the mutation can occur in a segment of the virus that makes it either more infectious or more deadly,” said Dr.Gabe Kelen, MD, director of emergency medicine at Johns Hopkins Medicine in Baltimore.

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The optimism around stock markets is boosted by the fact that the Federal Reserve reported last week that it is still waiting for improvements before changing a monetary policy.  The stimulus program would remain in place until the economy, and the labor market makes a full recovery.

The prospect of rate hikes could impact the U.S. economy’s growth while the current ultra-loose monetary policy is good for risk-takers. The U.S. Federal Reserve raised expectations for real GDP growth this year to 7.0%, and the unemployment rate should fall to 4.5% by the end of 2021.

The focus of investors will turn on the second-quarter earnings season, and according to estimates, earnings for S&P 500 companies are expected to rise 65.8%. The focus will also be on a series of economic reports; the U.S. will release June inflation figures and the usual employment-related numbers this week.

S&P 500 advanced to record highs at the beginning of the week

 S&P 500 (SPX) advanced to record highs at the beginning of the week, and if the price jumps above 4,400 points, the next target could be around 4,500 points.

Data source: tradingview.com

The current support level stands at 4,200 points, and if the price breaks it,  we have the open way to 4,000 points.

Dow Jones continues to trade near record highs

The Dow Jones Industrial Average (DJIA) continues to trade near record highs, and if the price jumps above 35,200 points, the next target could be around 35,500 points. On the other side, if the price falls below 34,000 points, it would be a firm “sell” signal, and the next target could be around 33,500 points.

Data source: tradingview.com

Nasdaq Composite could reach 15,000 points in the upcoming days

The Nasdaq Composite (COMP) advanced above 14,700 points, and as long the price is above this trend line and 14,000 points, this index remains in a bull market. If the price jumps above 14,800 points, the next target could be around 14,900 or even 15,000 points.

Data source: tradingview.com

Summary

Investors are not worried that the U.S. economy could be hit by the fast-spreading Delta variant of the coronavirus, and the focus will turn on the second-quarter earnings season. Dow Jones, S&P 500, and Nasdaq continue to trade at record highs, and according to the rules of technical analysis, we can see even higher levels this week.

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