• US500 remains near breakout level
  • US housing data comes in below forecast
  • Morgan Stanley delivers strong trading update

US indices have been pretty quiet today with the US500 continuing to oscillate around its prior breakout level of 2808. The outlook for the market appears to remain in favour of the bulls with Tuesday’s session seeing some strong gains as price breached and ended the day above prior resistance around 2808. The price action is a little choppy but higher highs and higher lows can be observed on shorter time frames and unless there’s a push below 2789 then the path of least resistance seem to favour the bulls.  

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 The US500 continues to look constructive and as long as the lows around 2790 remain intact then higher prices could lie ahead. Source: xStation

The main event for stocks this afternoon could be the 2nd day of Fed chair Powell’s testimony with the only data out of note the latest housing figures which were mildly disappointing. Both the number of housing permits and housing starts came in below the consensus forecasts with prints of 1.27M (1.33M exp) and 1.17M (1.32M exp).

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 The change in both housing permits issued and new housing starts remains close to zero with both these metrics little changed in recent years. Source: XTB Macrobond

Earnings season is now in full swing in the US with Morgan Stanley the latest big bank to deliver their results. There’s a lot to like about the latest trading update from Morgan Stanley with profits surging higher on trading and investment banking gains. The group’s EPS for the quarter was $1.30 – well above the $0.87 forecast – while revenues also beat, coming in at $10.6B vs calls for a reading of $10.1B. Institutional securities, home to Morgan Stanley’s trading and investment banking business enjoyed a 19% rise in revenue to $5.7B. Shares are called to open around 3% higher in the stock 

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 Morgan Stanley is expected to open higher this afternoon, but the stock remains below its 200 day SMA. Source: xStation