Dow Jones Industrial Average middles as investors chew on mixed US numbers

• Dow Jones treads water near 38,550.00 after US data comes in mixed.
• US Factory Orders activity rises, but with steep revisions.
• First batch of labor figures comes in softer ahead of Friday’s NFP print.

The Dow Jones Industrial Average (DJIA) is struggling to make gains on Tuesday after US data gave investors little reason to push the needle in either direction. US factory activity rose faster than expected in April, but previous prints saw a harsh downside revision. JOLTS April employment vacancies declined, revealing a still-tight labor market as Friday’s US Nonfarm Payrolls (NFP) looms ahead later in the week.

April’s Factory Orders rose 0.7% MoM, beating the forecast 0.6% but the previous print saw a sharp downside correction, getting revised to 0.7% from the initial print of 1.6%. JOLTS Job Openings in April fell to 8.059 million, below the forecast 8.34 million and easing from the previous 8.355 million, which was revised from 8.488 million. Looking deeper into the JOLTS figures, the labor vacancy rate fell to 4.8% from the previous 5.0%, while the number of job openings remained little-changed at 8.1 million overall. A tightening job market helped to shave some points off of Treasury yields, but the move lower in bonds did little to support equities on Tuesday.

With markets fully pricing in a first quarter-point cut from the Federal Reserve (Fed) in November, investors will be pivoting to Friday’s NFP labor figures, hoping for signs of further easing in the US economy that could push the Fed towards rate cuts sooner rather than later. Friday’s NFP print is expected to show the US economy added 190K new jobs in May, up from the previous month’s print of 175K.

Dow Jones news

The Dow Jones is stuck in the midrange on Tuesday, with roughly half of the major equity index’s constituent securities facing small losses on the day. Caterpillar Inc. (CAT) is leading the charge lower, down -1.45% to $326.68 per share. On the high side, Honeywell International Inc. (HON) climbed 2.22% to $206.93 per share on Tuesday. HON is slowly gaining ground after investors initially balked at Honeywell’s completion of a $4.95 billion acquisition of Carrier, a digital security firm focused on cloud-based storage protection. Investors remain skeptical that the acquisition will contribute as much to Honeywell’s diversification into digital services as the company hopes.

Dow Jones technical outlook

Dow Jones continues to grind chart paper near 38,550.00 after tumbling to near-term lows at the 38,000.00 handle. The major equity index clipped into record highs just above 40,000.00 in May, but bulls are struggling to keep bids on-balance as broader sentiment sags.

The DJIA is still trading deep into bull country, well above the 200-day Exponential Moving Average (EMA) at 37,275.22, but investors will need firmer signs of Fed rate cuts before resuming the buying party and pushing the Dow Jones back into record highs. The index is still up 2.45% in 2024, but recent short pressure has dragged the DJIA down -3.6% from all-time peaks above 40,000.00.

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