Stocks reached another record high on better than expected second quarter GDP and company earnings. US second quarter GDP growth slowed down to 2.1% but 0.1% better than economists' expectation. Company earning growth also slowed to single digit on a yearly basis but stronger than street consensus. These economic data did not change the expectation of a 0.25% rate cut at the Fed's meeting next Wednesday. For the week, S&P 500 index closed at 3025 up 1.65%, Dow Jones Industrial Average gained 0.14% and technology laden NASDAQ composite index increased 2.26% for the week.
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| Weekly chart of S&P 500 index |
S&P 500 index looks to be forming a rounded top and stays 5.4% above its 28 week moving average. Its momentum indicator is in the overbought region without sign of decreasing. We do not expect much movement from the index before the Fed meeting as this market has been driven by interest cut expectation. We will have clearer picture of the market direction after Fed's announcement next Thursday.
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