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Stock Market Breadth

11 October 2021

Stock markets are likely to remain reticent today as the biggest market, the US, will be closed today for a bank holiday. Overall, investors and traders are mainly going to try to make some sense out of the US NFP data,­­­ which really rattled the markets on Friday as the number came in much lower than the market’s expectations. In addition to this, investors and traders are also going to be focused on the US earnings as well. Companies like JP Morgan, Goldman Sachs and Citigroup all will be reporting their earnings this week.

Overall, analysts expect the S&P 500 to show growth of 27.6% for the S&P 500 during the third quarter. Financial sector is likely to see some serious gains as traders are expecting overall environment to remain favourable for banks.

Over in Asia, the focus is still on the Chinese property giant, Evergrande group. The company missed two interest rate payment deadlines last month and more bond coupon payments are due today as well. Trading in company’s shares has been suspended for some time, since October 4th.  

Asian Markets 

The Asian stock market traded mostly higher on the first trading day of the week. The Nikkei index advanced 1.55%. The HSI index increased by 2.27%, while the Shanghai index gained 0.41%. The ASX index dropped by 0.35%.

The Dow Jones’ market breadth lost further momentum on Friday. 63% of the Dow Jones stocks traded above their 200-day moving average. The S&P 500 stock breadth also displayed weakness on Friday.61% of the shares traded above their 200-day moving average. 

Dow Jones Futures Today

The Dow Jones futures are trading lower today and the cash index will remain closed today. In terms of economic data, investors will be looking at the US CPI reading which is due on Wednesday. In addition to this, we also have the FOMC Meeting Minutes taking place on Wednesday this week and the expectations are that the Fed may drop some hawkish hints during their monetary policy meeting.  The forecast for the CPI data is 0.3% while the previous number was also the same. 

The Dow Jones futures are likely to remain lifeless today as the US stock market is closed for a public holiday today. In terms of the Dow Jones’s price action, there is no doubt that the Dow’s price action has been consolidating for the last number of days, which means traders are lost for direction.

Having said that, the price is still maintaining its upward trend and this is because the Dow’s price is trading above the 200-day SMA on the daily time frame. However, the price is also struggling to stay above the 50 and 100-day SMA on the same time frame as well. As for the RSI, it is maintaining its trend of lower highs on the daily time frame which means that bulls still have some momentum. The near term support is at 33,365, while the resistance is at 35,633.    

Stock Market Rally

The S&P 500 stock index closed lower on Friday; the index declined by 0.19%. The consumer discretionary sector led the index lower and 9 out of 11 sectors closed lower.  The Dow index declined on the final trading day of the last week; the Dow stocks moved the index lower by 0.03%. 12 shares declined, while 11 shares closed higher.  The NASDAQ composite, the tech-savvy index, closed lower by 0.51% on Friday.

APA Corp stock contributed the biggest gain, soaring 6.84%. Citrix systems stock was the largest drag; it fell by 5.65%. The S&P 500 stock index is up 14.74% so far this year.

Chevron Corp provided the biggest help for the Dow Jones; it advanced by 2.24%, while Merck & Co was the largest decliner, it fell by 1.59%. 




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