Dow Jones Climbs Earlier than Election, Sending Heatwaves Throughout Asia-Pacific

DOW JONES, ASX 200 INDEX OUTLOOK:

• Dow Jones had an honest rebound as buyers anticipated a democratic sweep within the US election
• RBA rate of interest determination, pandemic developments and Ant IPO are in focus too
• ASX 200 rebounded for a second day, going through a right away resistance stage at 6,000

Dow Jones Index Outlook:

The Dow Jones Industrial Common (DJIA) index rebounded 1.6% on Monday as market contributors counted all the way down to the US presidential election. Current heavy promoting within the US inventory market could have created a chance for buyers to purchase on the dips, particularly when many are anticipating a “Blue Wave” – a Democratic sweep – election end result. If Biden wins, the Democrats could also be empowered to push by means of a bigger fiscal stimulus invoice on the expense of a wider deficit to alleviate the financial pains led to by one other Covid-19 viral wave.

On the flip aspect, a “Trump-win” end result, which isn’t broadly anticipated, could result in speedy unwinding actions and potential risky market reactions. For those who can recall what occurred within the 2016 election, that was the type of the worth motion we might even see. Secure-haven property just like the US Greenback, Japanese Yen and Treasuries will probably spike up, whereas risk-linked fairness index futures, rising market currencies and commodities could fall.

US company earnings continued to fare properly, with 24 out of 26 S&P 500 corporations beating analysts’ EPS estimates yesterday. Up to now within the earnings season, greater than 80% of the blue chip corporations have launched better-than-expected Q3 outcomes.

The US has registered 74,236 new coronavirus circumstances on November 1st, marking a decline for the second day after hitting a document of 99,784 on October 30th. Nonetheless, the general development of virus counts appears to be like alarming. Pandemic danger stays one of many high hindering components over the financial restoration, and thus extra fiscal and financial stimulus measures are wanted within the EU and the US to cushion the impacts. This will weigh on the Euro and the US Greenback within the weeks to return.

Map of circumstances (final 14 days)

Supply: Google

Asia-Pacific shares look set to commerce broadly largeron Tuesday, led by Australia, Hong Kong and mainland China. Japanese markets are shut for a public vacation.

Chinese language fintech large Ant Monetary will debut in each Shanghai and Hong Kong on November 5th, shortly after the US election. Brokers mentioned that it was buying and selling at HK$ 120 – a 50% premium over the IPO worth – within the gray market yesterday. This factors to a powerful investor demand for the fintech firm. In the meantime, Jack Ma and Ant’s high executives have been summoned by Chinese language regulators for talks, elevating issues over the corporate’s prospects.

On the macro entrance, the RBA rate of interest determination and US manufacturing unit orders are among the many high occasions. Discover out extra on our financial calendar.

Sector-wise, Eight out of 9 Dow Jones sectors closed within the inexperienced, with 83.3% of the index’s constituents ending larger on Monday. Supplies (+5.12%), vitality (+3.81%) and industrials (+3.52%) have been among the many greatest performers, whereas communication providers (-0.23%) and knowledge expertise (+0.48%) have been lagging behind.

Dow Jones Index Sector Efficiency 02-11-2020

Technically, the Dow Jones index examined a key assist stage at 26,600 (23.8% Fibonacci retracement) and has since rebounded. This may very well be a technical rebound, nevertheless, because the index is more likely to type a “Loss of life Cross” on its every day chart, with 20- and 50-Day Easy Shifting Common (SMAs) crossing under the 100-Day SMA. The formation of a “Loss of life Cross” means that promoting stress could also be prevailing.

Dow Jones Index – Each day Chart

ASX 200 Index Outlook:

Technically, Australia’s ASX 200 inventory benchmark hit a serious resistance stage at 6,200 and has retraced since then. The index has entered into the decrease Bollinger Band, suggesting that downward stress is prevailing. If ASX 200 may stand above its 20-Day SMA, it might sign a possible development reversal. Instant resistance ranges could be discovered on the 6,000 after which 6,200.

ASX 200 Index – Each day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Feedback part under or @margaretyjy on Twitter