Bespoke’s Morning Lineup – 7/16/21 – Nine Would Be Fine

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“The first principle is that you must not fool yourself, and you are the easier person to fool.” – Richard Feynman

Futures are higher this morning ahead of Retail Sales, Business Inventories, and a preliminary read on Michigan Confidence. On the Retail Sales front, both the headline and ex Autos readings came in significantly ahead of forecasts.

Summer Fridays are typically slow, but one area of excitement will be the Nasdaq 100 where the index needs to close about 35 points higher today in order to extend its current weekly winning streak to nine.  Based on where futures are currently trading, the index should be in the green for the week to start the trading day, but where it finishes will be more important.  Whether the streak ends at eight or extends to nine, though, it would still be the longest weekly winning streak for the index since the first half of 2019.

Read today’s Morning Lineup for a recap of all the major market news and events from around the world, economic data out of Asia and Europe, the latest US and international COVID trends including our vaccination trackers, and much more.

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The picture for the three major indices shows vastly different pictures depending on which index you look at.  Starting with the Russell 2000, it has been a major laggard and yesterday was on pace to close more than 1.5% lower for the third consecutive day, but a late-day bounce erased more than two-thirds of the decline.  As weak as the Russell has been lately, the longer-term chart is far from breaking down as it remains stuck in a range after surging in late 2020 and into early 2021.

For large-cap stocks, the picture looks much different.  Both the Nasdaq 100 and S&P 500 hit record highs earlier this week but have been wobbling in the last few days.  While the Russell 2000 trades in oversold territory, the large-cap indices remain overbought so they could be susceptible to some more consolidation in the days and weeks ahead.