Dow Jones Pulls Again Whereas Nasdaq Surges, Grasp Seng Might Rise

DOW JONES, HANG SENG INDEX, ASX 200 INDEX OUTLOOK:

• Dow Jones, S&P 500 and Nasdaq 100 indexes closed -0.16%, +0.43% and +1.12% respectively
• Cyclical sectors retreated whereas tech shares rallied on Monday, cheering the Fed’s affected person stance on charge hikes
• The China NBS manufacturing PMI disappoints. APAC markets are positioned to commerce larger

Jackson Gap, Tech Rally, USD, Crude Oil, Asia-Pacific at Open:

Wall Road equities prolonged larger into report territory as market members welcomed a dovish-biased message from Fed Chair Jerome Powell in his speech on the Jackson Gap symposium final week. Powell mentioned that the central financial institution is prone to begin tapering its $120 billion per thirty days bond buying program by this 12 months, largely in keeping with market expectations. He additionally emphasised that rate of interest hikes won’t instantly observe after tapering was over. That mentioned, the ultra-low rate of interest surroundings is right here to remain, benefiting the tech sector that’s arguably the most delicate to adjustments in charges.

Markets responded positively, with the S&P 500 and Nasdaq 100 climbing 0.43% and 1.12% respectively on Monday. The Dow Jones Industrial Common misplaced 0.16% nevertheless because the cyclically-oriented sectors pulled again. The DXY US Greenback indexconsolidated alongside Treasury yields, assuaging strain on threat belongings. This means that buyers are effectively ready for tapering, and Powell’s speech soothed market fears and boosted confidence.

In the meantime, the Chinese language NBS manufacturing PMI studying dipped to 50.1 in August, falling wanting the baseline forecast of 50.2. This additionally marked the bottom studying since February 2020, when the Covid-19 outbreak first kicked in. A softer-than-expected growth within the manufacturing sector underscored mounting downward momentum on the planet’s second-largest economic system. This will likely weigh on buying and selling sentiment over Asia-Pacific markets at the moment.

NBS China Manufacturing PMI – Previous 12 Months

Supply: Bloomberg, DailyFX

Asia-Pacific markets are positioned for a combined begin to the day. Futures in Japan, mainland China, South Korea, Taiwan, Singapore and India are within the crimson, whereas these in Australia, Hong Kong, Malaysia, Thailand are within the inexperienced.

Trying forward, Eurozone core inflation charge leads the financial docket alongside US CB shopper confidence. In the meantime, merchants are additionally ready for Friday’s US non-farm payrolls quantity for clues concerning the Fed’s subsequent coverage transfer. Discover out extra from the DailyFX calendar.

Hong Kong’s Grasp Seng Index (HSI) climbed 0.52% on Monday as buyers took the current selloff as a chance to build up extra. The inventory connections registered HK$ 4.17 billion of web Southbound outflows, marking a complete 4-day lack of HK$ 11.56 billion. It means that mainland buyers stay bearish on Hong Kong shares amid intensified regulatory crackdown on non-public sectors. The general development stays bearish-biased for the Grasp Seng Index.

Grasp Seng Index vs. Southbound Flows

Supply: Bloomberg, DailyFX

Trying again to Monday’s shut, Four out of 9 Dow Jones sectors ended larger, with 50% of the index’s constituents closing within the inexperienced. Shopper staples (+0.63%), shopper discretionary (+0.45%) and knowledge know-how (+0.42%) have been among the many greatest performers, whereas supplies (-2.14%) and financials (-1.72%) trailed behind.

Dow Jones Sector Efficiency 30-08-2021

Supply: Bloomberg, DailyFX

Dow Jones Index Technical Evaluation

The Dow Jones index breached above a key resistance stage at 34,920, thus opening the door to additional positive factors in direction of 37,500 – the 261.8% Fibonacci extension. Costs stay in an “Ascending Channel”, as highlighted on the chart under, suggesting that the general development stays tilted to the upside. Bearish MACD divergence means that upward momentum could also be weakening nevertheless.

Dow Jones Index – Day by day Chart

Grasp Seng Index Technical Evaluation:

The Grasp Seng Index shaped an “Ascending Triangle”, trending decrease over the previous few months. An instantaneous assist stage might be discovered at 24,850, adopted by 23,125 – the earlier low seen in Sep 2020. Breaching a right away resistance at 26,200 might open the door for additional positive factors. The MACD indicator shaped the next low just lately, suggesting that bullish momentum could also be constructing

Grasp Seng Index – Day by day Chart

ASX 200 Index Technical Evaluation:

The ASX 200 index pulled again sharply to check a right away assist stage at 7,500 – the earlier resistance. The general development stays bullish-biased, as recommended by the consecutive larger highs and better lows shaped over the previous few months. The MACD indicator shaped a bearish crossover after hitting trendline resistance, suggesting that promoting strain could also be prevailing.

ASX 200 Index – Day by day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

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