The S&P 500 Index opened the week slightly more than 1 percent away from its all-time high. The broad index remains in an uptrend this year with a series of higher lows, but since May the S&P 500 Index has been in a virtually flat trading range. A rally of 30 points puts the index at a new all-time high, while a decline of 30 points puts the index at levels last seen in November 2014. A move of that size is unlikely in the week ahead, but the market maintains a bullish bias. For the time being, the sector weighing most heavily on stocks and preventing a breakout is energy.
Investors will likely focus on China and the commodities complex over the coming days. China’s PMI slumped to 47.8 in July, sending oil and copper prices lower in early Monday trading. West Texas Intermediate Crude briefly traded with a $45 handle on Monday morning, its lowest level since bottoming in $43 range in March. Individual shares such as Exxon (XOM), Chevron (CVX) and ConacoPhillips (COP) are also reaching long-term support levels.
Personal income increased more than expected in June, although consumer spending was lower than expected and consumer inflation remains muted. The stronger income number is good to see after the government reported wage growth slumped to its lowest level in 30 years last quarter. As expected, the PMI index for July came in at 53.8. Construction spending for June will be released this week as well as the unemployment rate for July. These data points take on more weight with the Federal Reserve contemplating an interest rate hike as early as September.
Earnings reports will still be coming in large numbers this week, headlined by Disney (DIS). Petrobras (PBR) and Barrick Gold (ABX) report from the struggling resource sector. Tenet Healthcare (THC), Coach (COH), Time Warner (TWX), Transocean (RIG), 3D Systems (DDD), Tesla (TSLA) and Duke Energy (DUK) are some of the other firms announcing earnings.