FXTM information and reviews
IronFX information and reviews
Libertex information and reviews
FXCC information and reviews
Markets.com information and reviews
FxPro information and reviews
47 085.73

Dow Jones hits fresh record high

18 February 2021

The Dow Jones index hit a fresh record high, adding another 0.3% on Wednesday. This is in contrast to the Nasdaq 100 index, which declined 0.54% to post a second straight day of losses, while the S&P 500 was little changed after the latest US cash session.

The Dow has been finding support around the psychologically-important 30,000 mark in the early stages of 2021, as its 50-day simple moving average continues guiding the index upwards.

With its 14-day relative strength index (RSI) yet to breach into overbought territory, coupled with the bullish momentum indicator (MACD), it suggests that this index still has more room to climb, at least from a technical perspective.

Which stocks helped the Dow higher on Wednesday (17 Feb)? And why?

Retail and consumer-centric stocks such as Verizon (+5.24%), Home Depot (+2.01%), and Nike (+1.61%) were among the biggest boosters to the Dow Jones index on Wednesday. This was on the back of better-than-expected retail sales seen in the US economy last month. January’s retail sales figures grew at 5.3% compared to December, registering its fastest month-on-month growth since June 2020. That 5.3% print far exceeded market estimates of 1.1%.

The data indicates that US fiscal stimulus is doing its part in boosting demand and consumption levels in the world’s largest economy.

Congress has approved $600 checks in late December, which translated into double-digit gains for the likes of online shopping, furniture stores, and even electronic appliances sales. And with President Joe Biden having pledged $1400 checks as part of his proposed $1.9 trillion fiscal stimulus package, potentially by mid-March, the evidence suggests that household demand could see a further boost next month, and help advance the stocks of companies exposed to the retail sectors.

January’s industrial production also came in at a better-than-expected rate of 0.9%, which suggests the US recovery momentum remains intact. Chevron (+3%) was another big contributor to the Dow’s mid-week gains, riding on the back of higher oil prices. US crude is now at its highest levels since January 2020, having already breached the $60/bbl mark this week. The surge in oil prices is largely due to the polar vortex in the States which has disrupted supplies while ramping up demand for heating fuels.

What could bring this party in US stocks to a halt?

But some segments of the markets are already skeptical about how much higher stock markets can go, considering the rise in Treasury yields. For context, 10-year Treasury yields have been steadily rising since August from that 0.5% region, with US stock indices rising in tandem. But 2021 has seen a supercharged advance in Treasury yields.

Yields on the 10-year have risen by as much as 40 basis points so far this year, breaching 1.3% this week. Much of this is due to the optimism surrounding the US economic outlook, and the recovery has been aided by multiple injections of fiscal stimulus and of the Covid-19 vaccine.

As the US outlook improves, Treasury yields rise. So too do the chances of the Fed paring down its support for the US economy and financial markets. And when the Fed does indeed taper, that’s seen as a negative for stocks markets, given that policymakers would then be choking the flow of easy money. Also, should yields keep rising from current levels, they then become more attractive for investors once more, who then might be tempted to revert funds back into those assets at the expense of equities. The timing of this pivot, in either the Fed’s stance or in investors’ asset allocations, all remains subject to debate, and markets are likely to contend with conundrum for a while more.



US Retail sales and other data has supported Dollar
US Retail sales and other data has supported Dollar

The US Retail sales notably exceeded expectations, adding 0.7% in August vs an expected 0.7% decline. The increase to August last year is an impressive 14.9%...

17 Sep 2021

Geopolitics Fire Up Up and Cryptos Are Booming
Geopolitics Fire Up Up and Cryptos Are Booming

Futures in the United States and Europe are trading lower today as investors are worried about the new security agreement between the U.S., the U.K. and Australia...

16 Sep 2021

UK inflation surges, stocks struggle
UK inflation surges, stocks struggle

European markets flat at the open this morning as UK inflation surged to a record high in August and Chinese economic data was soft. China’s retail sales fell to...

15 Sep 2021

Gold is anxiously waiting for the US inflation data
Gold is anxiously waiting for the US inflation data

Gold, hovering around $1790 since last Thursday, might take an even harder hit. The bears are waiting for a good signal to launch an attack. It is now holding it below significant levels...

14 Sep 2021

Here Is Why Stock Futures Are Trading Lower
Here Is Why Stock Futures Are Trading Lower

Despite a week of doom and gloom in the stock markets, futures in the United States are still trading lower. Since February, the S&P 500 has been on its longest...

13 Sep 2021

Fintech - too big to be?
Fintech - too big to be?

Two of the world’s largest economies are in sync with pressure on their fintech giants. Access to user data and the growth of ecosystems have effectively...

13 Sep 2021

Editors' Picks

OctaFX information and reviews
HotForex information and reviews
XM information and reviews
FXCM information and reviews
Vantage FX information and reviews
Vantage FX
Moneta Markets information and reviews
Moneta Markets

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.