US Stocks Struggle with Resistance at 34,000

The Dow Jones had a quiet day on Friday with no significant economic data releases. Still, the index is struggling to make an advance above 34,000.

US30 – Weekly Chart

US30 – Weekly Chart

US30 has found some resistance at 34,000 on the weekly chart and needs a strong close, or a correction could unfold.

The United States economy has some data on Thursday with monthly producer price inflation data. That could fuel further debate about inflation after Tuesday’s monthly inflation number, which remained stubborn, despite a monthly dip. 

Some analysts think the outlook for the US economy is better than Wall Street’s, and the country will likely avoid a recession or even a slowdown as inflation continues to cool. 

Ed Yardeni, CEO of Yardeni Research, said that the world’s largest economy may even avoid the so-called “soft landing” as the Federal Reserve pushes ahead with efforts to rein in consumer-price pressures. 

“I’m not in the recession camp. I’m in the soft landing camp now and I’m wondering whether it should be in the no landing camp,” Yardeni told CNBC. His comments on “no landing” suggest the economy could avoid a hard or soft landing slowdown scenario. Yardeni also believes the Fed’s benchmark rate will begin to fall next year, falling to 4.1% in 2024 and 3.1% in 2025, but doesn’t expect a cut this year. 

Some executives are not convinced as KPMG announced it was cutting almost 2% of its workforce in the United States, making it the first of the “Big Four” accountancy firms to cut jobs, according to the Financial Times on Wednesday. 

Traders should look for the market reaction to the PPI figures on Thursday. A correction could occur next week if the US30 cannot break above the 34,000 level ahead of Friday’s close.

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