Dow Jones Pulls Nikkei 225, ASX 200 decrease on Alarming Covid-19 Resurgence

DOW JONES, NIKKEI 225, ASX 200 INDEX OUTLOOK:

• Dow Jones had its worst day in additional than a month amid virus, election and stimulus considerations
• US company earnings continued to beat forecasts, however did not raise market confidence
• Nikkei 225 and ASX 200 index could lead Asia-Pacific market decrease. Ant Monetary IPO in focus

Dow Jones Index Outlook:

The Dow Jones Industrial Common (DJIA) index fell 2.29% on Monday, marking its worst buying and selling day since 21st September. A worrying virus resurgence throughout the US and Europe and a pending US reduction bundle are among the many high weighing components. US company earnings continued to fare nicely, however buyers are maybe trying past the present season and assessing a doubtlessly slower tempo of progress within the winter.

The US has registered 59,691 new coronavirus circumstances on October 25th, marking a decline for the second day after hitting a report on 23rd. But there seems to be lack of incentive from the federal government to impose lockdown measures earlier than the US election, rendering threat property susceptible to additional pullback ought to coronavirus circumstances proceed to climb.

Map of circumstances (final 14 days)

Supply: Google

Asia-Pacific shares look set to commerce broadly decrease on Tuesday. They could, nevertheless, reveal resilience in opposition to exterior headwinds. Virus conditions are higher managed throughout the Asia-Pacific area, with China remaining a key progress engine. Some 137 new confirmed Covid-19 circumstances have been reported in Xinjiang province on Friday, leading to a fast response to check Three million individuals within the space.

Chinese language fintech large Ant Monetary, presumably the world’s largest IPO ever, has been priced at HK$ 80 per share. Ant will probably be listed in each Shanghai and Hong Kong on November 5th, shortly after the US election.

On the macro entrance, Chinese language industrial earnings and US sturdy items orders and client confidence are among the many high occasions. Discover out extra on our financial calendar.

Sector-wise, all 9 Dow Jones sectors closed within the purple, with 96.7% of the index’s constituents ending decrease on Monday. Industrials (-3.07%), supplies (-2.84%) and financials (-2.80%) have been among the many hardest hit, whereas defensive-linked client staples (-1.15%) and healthcare (-1.54%) have been performing barely higher.

Dow Jones Index Sector Efficiency 26-10-2020

S&P 500 Index Q3 Earnings Replace – October 26th 2020

Technically, the Dow Jones index has decisively damaged down the 50-Day Easy Shifting Common line at 28,040 (chart beneath). Breaking this speedy degree could have opened the room for extra draw back in the direction of the following assist ranges at 27,755 (the 50% Fibonacci retracement) after which 27,470 (the 61.8% Fibonacci retracement) respectively.

The MACD indicator shaped a “Demise Cross” final week and costs have been trending decrease since. This implies that bearish momentum is dominating for now. The index value has additionally pierced by means of its decrease Bollinger Band, signaling robust downward momentum.

Dow Jones Index – Each day Chart

Nikkei 225 Index Outlook:

Technically, the Nikkei 225 index has seemingly shaped a “Rising Wedge” on its day by day chart, with the 20-, 50- and 100-Day SMA traces all trending up steadily over the previous few months. The Nikkei could threat a brief pullback in opposition to the backdrop of exterior headwinds, doubtlessly breaking the “Rising Wedge” decrease if selloff strain within the US market persists. A right away resistance degree might be discovered at 24,000 – the earlier excessive seen in mid-February 2020. The 50-Day SMA might be perceived as an instantaneous assist degree.

Nikkei 225 Index – Each day Chart

ASX 200 Index Outlook:

Technically, Australia’s ASX 200 inventory benchmark hit a serious resistance degree at 6,200 and has retraced since then. The near-term development seems to be bearish-biased, with the MACD forming a “Lifeless Cross” lately. Fast assist ranges might be discovered on the 6,000- 6,020 space, the place the 50-Day and 100-Day SMA lie.

ASX 200 Index – Each day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

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