S&P 500 Futures Decrease on Election Safety Points, APAC Shares Might Fall

S&P 500, HANG SENG INDEX OUTLOOK:

• S&P 500 index futures fell on election safety considerations, fading stimulus hopes
• Q3 company earnings remained robust, Tesla smashed EPS forecasts
• Dangle Seng Index (HSI) could kind a “Double Prime” after failing to interrupt a key resistance at 24,750

S&P 500 Index Outlook:

“Danger off” sentiment swept Asia-Pacific markets at open as US nationwide safety officials mentioned that Iran and Russia have each obtained details about American voters’ registrations and try to affect the election end result. All three main US fairness indices fell over 0.5% instantly after the information, as uncertainty surrounding the US election surged.

Save-haven bid fueled a rally within the US Greenback, whereas the risk-linked Australian and New Zealand {Dollars} fell. Asia-Pacific equities appeared set to open broadly decrease, led by the Nikkei 225 (-0.71%) and ASX 200 (-1.11%).

Crude oil costs widened the losses to 4.2% as sentiment soured. Final night time, the API report confirmed an sudden rise in US stockpiles, dragging the vitality sector securities decrease. In addition to, market sentiment was additionally weighed by fading hope for a right away stimulus package deal and rising coronavirus instances throughout the nation. Some 60,598 new instances had been reported in america over the past 24 hours, including to its complete instances of 8.35 million.

The intense spot may be robust company earnings, with continued to smash expectations from the upside. Tesla has delivered robust Q3 outcomes, and its share value surged greater than 3% after market shut. Tesla’s Q3 income, earnings-per-share (ESP) and ahead steerage have all smashed analysts’ forecasts, and the corporate seems on observe to delivering half 1,000,000 autos in 2020.

On Wednesday, 25 out of 28 main US firms launched better-than-expected earnings (desk beneath). Up to now within the earnings season, greater than 80% of the S&P 500 constituents have crushed their EPS forecasts.

S&P 500 Earnings – October 21st2020

Supply: Bloomberg

On the political entrance, the final presidential election debate will probably be held at 9am Singapore time on Friday, October 23rd (9pm ET, October 22nd). Merchants could get extra clues from this debate with reference to Biden’s and Trump’s coverage variations. Markets appeared to have closely priced in a Biden-win situation, rendering them fragile to unwinding actions ought to the election end result flip towards expectations.

Sector-wise, 9 out of 11 S&P 500 sectors closed within the pink, with 65% of the index’s constituents ending decrease yesterday. Power (-1.99%) was a transparent drag to the index as crude oil costs fell greater than 4%. In addition to, industrials (-0.99%) and client discretionary (-0.63%) had been additionally had been among the many worst performers, whereas communication providers (+1.29%) and client staples (+0.12%) had beenperforming higher.

S&P 500 Index Sector Efficiency 21-10-2020

Supply: Bloomberg, DailyFX

Technically, the S&P 500 index seems to have entered a consolidative interval since mid-October (chart beneath). The near-term development has doubtless turned bearish as decrease lows had been noticed. An instantaneous assist degree might be discovered at 3,420 – the 38.2% Fibonacci retracement. Breaking beneath 3,420 could open room for extra losses in the direction of the following assist degree at 3,380 – the 50% Fibonacci retracement.

S&P 500 Index – Every day Chart

Dangle Seng Index Outlook:

Hong Kong’s Dangle Seng Index (HSI) could wrestle to interrupt above a key resistance degree at 24,750 as a consequence of exterior headwinds. The FBI’s investigation on election safety points have led to a broad decline in Asia-Pacific shares, which may weigh on sentiment in Hong Kong.

Technically, the HSI failed to interrupt above a key resistance at 24,750 – the 100-Day SMA. A retracement from right here could result in the formation of a “Double Prime” sample, which is a bearish indicator. The general development of HSI stays bullish, nevertheless, because the 20-Day Easy Transferring Common (SMA) line is about to kind a “Golden Cross” by crossing above the 50-Day SMA line. A breakout above 24,750 could open room for extra upside in the direction of the 24,900-25,00Zero space.

Dangle Seng Index – Every 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