US OPEN: Stocks await major events this week

• ISM ticks up in April
• JP Morgan Gains following FRB takeover
• Arista Networks to publish report after earnings

Following a very strong end to the April trading US stocks opened flat on Monday with Europe mostly off due to the Labour Day and full focus on the events ahead this week and especially the Fed decision. The ISM manufacturing release did little to change the market situation. The index was up from 46.3 to 47.1 on the back of somewhat stronger orders, production and employment. At the same time prices subindex also rose and moved back above the 50 points threshold. That could be another reminder that disinflation could look easy now with huge base effects but could be tricker down the road and force the Fed to keep rates elevated for longer.

The ISM followed our regional composite slightly higher in April but both remain in the slowdown territory. Source: XTB, Macrobond

Banking sector is in the spotlight after the forced takeover of First Republic Bank (FRC.US) by JP Morgan. The details of the deal seem to be positive for the largest US bank (at least on paper) and thus the stock is one of the winners during Monday’s trade.

Banking stocks are mostly up led by the JP Morgan. Source: XTB

JP Morgan has opened with the bullish gap and is testing a resistance.

The earnings season remains in full swing after mostly promising reports last week (mainly from Meta and Microsoft). While all eyes will be on Apple this Thursday investors should also watch somewhat smaller companies that deliver solid growth. One such company is certainly Arista Networks – a cloud network company that has a strong history of earnings beat and unsurprisingly – an amazingly bullish chart. The company will release its quarterly report after the bell.

Arista Networks (ANET.US) has been in a flag formation lately but has managed to defend 50 day sma. Long term price action has been incredibly bullish.