FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
FXCC information and reviews
FXCC
90%
Markets.com information and reviews
Markets.com
89%
FxPro information and reviews
FxPro
88%
EUR/USD
1.1724
BTC/USD
47 085.73
GBP/USD
1.3726
USD/JPY
109.9930
USD/CHF
0.9326
USD/CAD
1.2774
EUR/JPY
128.9558

Dow strains for 30000 amid persisting pandemic woes


19 November 2020

Recent positive developments surrounding a Covid-19 vaccine have amped up investors, as they contemplate a return to life as we knew it before the pandemic, or at least as close to it as possible. Amid such euphoria, investors have poured back into sectors that have been devastated by the pandemic.

Yet for all that’s been made about the rotation play, the 30,000 line has proven elusive for the Dow Jones index thus far, despite multiple attempts to attain that level this month. At least the Dow can draw comfort that it’s a long ways above its 200-day simple moving average, which has done its job well as a key support level since August.

The Dow’s strains appear to suggest that investors are having to douse some of their optimism surrounding the outlook for the global economy. Although Pfizer revealed yesterday that its Covid-19 vaccine was 95 percent effective and could apply for emergency authorization by the weekend, it could be months out before the vaccine can reach a sizeable enough portion of the global population.

In the meantime, markets may have to endure more pandemic-induced pain on the global economy. Covid-19 has already claimed over 250,000 lives in the US alone, with the global death toll stands at around 1.34 million. The coronavirus has infected about 56 million people worldwide, with a resurgence in cases in major cities such as Tokyo and New York, with the latter deciding to shut down its schools once more. At the time of writing, US equity futures are edging lower, which suggests that Wednesday's declines on all three major benchmark indices are set to be extended later today.

Still, it’s important to take stock of what’s transpired in equity markets in recent weeks.

The Dow Jones index’s 11 percent month-to-date gain is more than the S&P 500’s 9.1 percent and the Nasdaq Composite’s 8.2 percent registered for the same period. Out of the Dow’s 30 constituents, Boeing’s 40 percent month-to-date advance leads the pack, while American Express and Chevron come in second and third place respectively, both with over 20 percent gains apiece. Keep in mind these three stocks account for over 10 percent of the overall index.

In contrast, pandemic-era stalwarts such as Apple and Microsoft are lagging behind as they find themselves in the bottom half of the index’s constituents in terms of gains registered so far this month.

Overall, the rotation play appears to be just getting started, and with more room to run, could eventually propel the Dow Jones index to that 30,000 promised land. Having said that, I must point out that the FXTM Trader's Sentiment on the Wall Street 30 (Mini) currently reads 54 percent short, and 46 percent long.

Still, equity bulls who are banking on more gains in the stock market are armed with the assurances by US health officials that 40 million doses of a Covid-19 vaccine, once its approved, can be distributed across the world’s largest economy by end-December. Such prospects could aid the US economic recovery to transpire at a faster clip. Also, the Fed’s ultra-accommodative monetary policy stance, coupled with the prospects of more incoming US fiscal stimulus, ensures that US stock markets have limited downside.

In short, it’ll likely be only a matter of time before we see the Dow Jones index setting a new record high above the 30,000 mark.

#source

Related

Dollar jumps, gold slumps, stocks nervous
Dollar jumps, gold slumps, stocks nervous

Worries that the US consumer is rolling over were dealt a major blow yesterday after the nation’s retail sales for August overpowered some gloomy forecasts. The retail sales...

17 Sep 2021

Energy is the play: how we get to $100 crude
Energy is the play: how we get to $100 crude

Natural gas futures in Europe and the UK are flying, while our natural gas (NG) CFD (the underlying is traded on the NYMEX) pushed over $5.60 and into 7-year highs...

16 Sep 2021

Are investors sleeping on systematic risk in China?
Are investors sleeping on systematic risk in China?

It’s time to talk about China. The situation is getting dicier as the nation’s second-largest property developer - Evergrande - is on the verge of default. Trading in the company...

16 Sep 2021

Sentiment sours as the S&P 500 tests key support
Sentiment sours as the S&P 500 tests key support

We head to quadruple witching in the US on Friday and notably options expiration (OPEX), and the weakness we see time and again in the week before seems...

15 Sep 2021

Dollar unscathed by soft inflation, equities resume slide
Dollar unscathed by soft inflation, equities resume slide

Dollar takes little damage despite signs US inflation has peaked - Wall Street resumes selloff - all eyes on China contagion risks - Canadian data coming up ahead of elections, gold wakes up...

15 Sep 2021

US inflation under the microscope
US inflation under the microscope

With the Fed having almost locked in a November taper announcement, the question now is whether Chairman Powell will use next week’s policy meeting to give the markets...

14 Sep 2021


Forex Forecasts

OctaFX information and reviews
OctaFX
86%
HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
Vantage FX information and reviews
Vantage FX
78%
Moneta Markets information and reviews
Moneta Markets
77%

© 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.