U.S. stock futures are higher after consumer spending increased more than expected in July. The Commerce Department reported a 1.9% gain in spending after rising by 6.2% in June. Consumer spending accounts for more than two-thirds of U.S. economic activity, and the report supports a rebound in the domestic economy despite the drag of the COVID-19 pandemic.
The S&P 500 had a wide-ranging trading day on Thursday and closed lower at 3484.55. The action was typical of an overbought market and extended after five days higher in a row. There was an uptick in volume with 2,319,438,848 shares traded, and the RSI index remains in the overbought zone closing at 77.31. We continue to believe some profit-taking could potentially come in soon, but it will should not last long, presenting a potential buying opportunity. Possible support is now at 3444.15 and then 3413.13.
We are currently long-term bullish and short-term bullish.
John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Windsor Wealth Planners & Strategist
Futures trading is speculative, leveraged, and involves substantial risks. Investing always involves risk, including the loss of principal, and futures trading could present additional risk based on underlying commodities investments.
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S stock market. Past performance may not be indicative of future results. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Opinions expressed are those of the author John N. Lilly III, and not necessarily those of Raymond James. “There is no guarantee that these statements, opinions, or forecast provided herein will prove to be correct. “The information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk, and you may incur a profit or loss. No investment strategy can guarantee success. The charts and/or tables presented herein are for illustrative purposes only and should not be considered as the sole basis for your investment decision. International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility. Investing in emerging markets can be riskier than investing in well-established foreign markets.
This is not a recommendation to buy or sell any company’s stock mentioned above.