(By Rich Bieglmeier) Once again, stocks tread water on sickly volume, essentially a do-nothing day from a chart watcher's point of view. Drifting on lower volume is a sign that neither buyers nor sellers are willing to take control for the last few days.
In a way, no bad news is good news when the trend has been, is higher. iStock still holds the view that the indexes have more room to move higher before any threat of a real correction takes hold.
With days like Monday, there really is little else we can write about to add any value. Fundamentally, nothing has changed; the world economy continues to slip. However, the more negative numbers get, the more computer programs anticipate monetary stimulus from central banks and the algorithms prop up stocks.
Maybe stocks can get moving in the right direction following Tuesday's Retail Sales report. The results will be released before the market opens and will shape the tone of early trading.
At 8:30 am eastern, Wall Street expects to see an increase of 0.3% for the headline number and a more robust 0.5% minus autos and gas.
According to 24/7WallStreet.com, "Many retailers are out today with July same-store sales results, and the month's gains appear to be better than first expected. The Thomson Reuters consensus estimate for sales growth was 3.1%, but the final tally looks to be a jump of 4.6%, not including drug stores. Research firm Retail Metrics had estimated growth at 3.3%, excluding drug stores." So, this side of the ledger should pull its weight in this morning's announcement.
Reuters reports "Major automakers reported U.S. auto sales for July that were somewhat softer than expected as high U.S. unemployment and weak consumer confidence kept would-be buyers on the sidelines." The June annual run rate was 14.1 million units per year, while analysts expect the July tally to be a touch under 14 million. If preliminary reports prove to be true, autos could drag the overall rate down more than forecasted.
Retail Sales' trend has declined since last summer. While we may see a jump from June's Retail Sales report, we don't see much upside for July. An on target result just might be good enough to get the bull's engines revving.
A new set of sectors could take stocks higher if the market marches uphill. Our weekly industry analysis shows large cap growth stocks coming into favor, especially Electronic Equipment and Component, Oil & Gas, and Life Insurance stocks are flashing signs of out performance.
Meanwhile, Hotels, Travel & Leisure and Recreational equities look limp. iStock will post our full report later today. Make sure you check back.