Dow Jones
US futures are rising as investors react to strong earnings from companies like Procter & Gamble (P&G), Texas Instruments, and Snap. The Dow Jones, S&P 500 index, and Nasdaq 100 are up by 0.60%, 0.65%, and 0.57%, respectively. The closely-watched fear and greed index remains at 58, which is a sign that investors are getting a bit greedy.
Later today, the focus among investors will remain being on earnings. Among the most notable companies that will release their earnings today are Tesla, Verizon, Chipotle Mexican Grill, and Biogen, among others.
In general, earnings have been relatively strong even as the world goes through a pandemic. For example, last week, earnings from big banks like JP Morgan and Citigroup were relatively strong. On the other hand, the only laggards were companies like Bank of America and Netflix.
Yesterday, results from Netflix showed that the company added just 2 million new members in the third quarter. That was 300k less than what analysts were expecting.
US equities are also rising because of the overall weaker US dollar. The dollar index, which is a gauge of the greenback’s performance, is down by more than 0.30%. And, analysts expect that the weakness will continue in the near term.
The main risk for the Dow Jones and other US equities is that there are limited chances that the US will have a stimulus deal before election. The main challenge is that the three important parts – house of representatives, senate, and the White House – have different visions about how the stimulus should be. The three have suggested a stimulus deal worth $2.2 trillion, $1.8 trillion, and $500 billion, respectively.
The bullish trend is going on in Europe. In the United Kingdom, the FTSE 100 index is up by 0.30% after the Office of National Statistics (ONS) released the inflation numbers. The data showed that the UK consumer prices continued to lag. The headline CPI figure rose at an annualised rate of 0.5% as the Eat Out to Help Out (EOHO) program ended. Interestingly, the country’s public debt rose by more than £34.5 billion in September, up from £29.38 billion in the previous month.
In Germany and France, the DAX index and CAC 40 futures are up by 0.65% and 0.60%, respectively.
The four-hour chart shows that the Dow Jones index is trading at $28,480, which is slightly above the intraday low of $28,156. The price is slightly above the 15-day and 25-day exponential moving average. It is also below the ascending channel that is shown in blue. The price has also formed a triple bottom pattern at the support of $28,160.
Therefore, I suspect that the index will continue rising in the near term as bulls aim for the next resistance at $28,800. However, a move below the triple bottom level if $28,160 will invalidate this trend.
