The stock market ended the previous week lower, with the Nasdaq 100 one of the indices that fell too. The hopes of a stimulus vanish by the day, and so the stock market disappointment is on the rise.
But one should not expect much moving into the U.S. election. No investor is willing to take risks ahead of the final result, especially considering what the polls show.
If we have a disputed election, the stock market will decline and the USD will rally due to its safe-haven status. On the other hand, if Democrats win, the market is expected to rally and the USD to decline on the hope of stimulus.
Therefore, one way or the other, some fiscal stimulus is poised to come after the elections. On a Trump win, more tax cuts are expected. On a Biden win, new fiscal stimulus.
Is it possible for the stock market to rally anyway? Until then, Intel just missed expectations at the end of the last week and is seen more than 10% lower, dragging on Nasdaq 100.
Intel announced better than expected earnings for Q3 2020. Moreover, it reinforced its willingness to buy back shares after the market stabilized and improved its end of the fiscal year forecast.
Yet, the market was disappointed as almost all businesses lost market share in the last quarter. That is especially true for the Data-Centric part of the business, where the Internet of Things revenue, for example, was down 33% when compared to Q3 2019.
Nasdaq 100 does not look that bad from a technical perspective. In fact, the price sits at horizontal support. Moreover, it forms a falling wedge, and courageous bulls may want to go long on a breakout above 11,800, place a stop at 11,500 and target a new all-time high. Expect slow price action for the week ahead as we get closer to Election Day.
