Nasdaq 100 Climbs on Stimulus Hopes, Netflix Misses, Nikkei 225 Might Rise

NASDAQ 100, NIKKEI 225 INDEX OUTLOOK:

• Nasdaq 100 futures climbed on early Wednesday, rebounding from an instantaneous help at 11,650
• Focus remained on the progress of US stimulus talks, whereas robust earnings could cushion the draw back
• Nikkei 225 index opened mildly increased, forming an “Rising Wedge” on the each day chart

Nasdaq 100 Index Outlook:

Wall Avenue futures prolonged positive aspects throughout early Asia buying and selling hours, in anticipation of development within the US aid package deal after Home Speaker Nancy Pelosi set a deadline to approve the stimulus proposal. Netflix’s massive earnings miss appeared to have little affect on the general market sentiment, whereas a majority of company America smashed consensus forecasts’ with upbeat Q3 outcomes.

On the macro entrance, at the moment’s launch of UK and Canadian inflation knowledge, alongside a speech by ECB President Christine Lagarde, might be carefully watched by foreign exchange merchants. The EIA may also report a string of crude oil stock knowledge that will set the tone for the vitality sector. Learn extra on our financial calendar.

The US corporate earnings continued to fare properly regardless of sporadic misses. On Tuesday, 15 out of 17 corporations launched better-than-expected earnings (desk beneath), except for Synchrony Monetary and Netflix. Netflix’s Q3 outcomes got here sharply beneath forecasts by way of earnings-per-share (EPS), new subscribers and ahead steerage as a result of a drastic slowdown in sign-ups over the summer season. Netflix’s share worth to plunged greater than 5% after market shut. Nonetheless, the general earnings image stays upbeat, which can shelter inventory markets towards election and stimulus dangers.

Sector-wise, 10 out of 11 S&P 500 sectors closed within the inexperienced, with 70% of the index’s constituents ending increased yesterday. Power (+1.13%), financials (+0.82%) and communication companies (+0.80%) had been among the many higher performers, whereas shopper staples (-0.11%) and healthcare (+0.13%) had been lagging.

S&P 500 Index Sector Efficiency 20-10-2020

Supply: Bloomberg, DailyFX

Technically, the Nasdaq 100 index seems to have entered a consolidative interval after the formation of a bearish “AB=CD” sample (chart beneath). The near-term development has probably turned bearish as advised by the formation of a “Loss of life Cross” within the MACD indicator. A direct help degree may be discovered at 11,650, the place the 38.2% Fibonacci retracement and the 20-Day Easy Transferring Common (SMA) line overlap. Breaking beneath 11,650 could open room for extra losses in the direction of the following help degree at 11,470 – the 50% Fibonacci retracement.

Within the medium time period, the current pullback seems extra like a technical correction, which can set the ground for increased highs. Each the 50- and 100-Day SMA strains stay upward-sloped, suggesting that the medium-term bull development stays intact.

Nasdaq 100 Index – Day by day Chart

Nikkei 225 Index Outlook:

Japan’s Nikkei 225 index opened 0.22% increased at 23,610, as merchants scrutinize the progress of a second US stimulus package deal. Robust US company earnings and stimulus hopes could set a constructive tone for Asia-Pacific buying and selling, whereas merchants await inflation knowledge from the UK and ECB President Lagarde’s speech later at the moment.

Technically, the Nikkei 225 index has probably fashioned a “Rising Wedge” on its each day chart, with the 20-, 50- and 100-Day SMA strains all trending up steadily over the previous few months. A direct resistance degree may be discovered at 24,000 – the earlier excessive seen in mid-February 2020. The 20-Day SMA may be perceived as a dynamic shifting help degree.

Nikkei 225 Index – Day by day Chart

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— Written by Margaret Yang, Strategist for DailyFX.com

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