Dow Jones
The Dow Jones index has started the week well. Futures tied to the index have added more than 56 points as US Treasury yields slide. The index is set for a busy week as investors wait for key corporate earnings by companies like Microsoft, Apple, and Facebook. It will also react to the latest Fed interest rate decision. The DJIA index is trading at $34,000, which is close to its highest level on record.
What happened: The Dow Jones index moved sideways last week as investors reacted to the relatively strong data from the United States. Companies continued reporting relatively strong earnings. Indeed, data compiled by FactSet showed that 25% companies in the S&P 500 index have released their earnings.
Of these firms, 84% of them reported earnings that were above analysts estimates. 77% of them have beat on revenue. Most importantly, the average growth rate of companies that have published their results is 33%. If this is the final reading after all S&P companies publish their results, it will be the fastest growth rate since 2010.
This will be an important week because the biggest companies in the Dow Jones will publish their results. These include companies like Apple, Boeing, and Microsoft. Other important non-Dow Jones firms to watch will be Alphabet, Visa, Texas Instruments, Amgen, Starbucks, Qualcomm, and Facebook. The index will also be watched closely because of the Fed decision. A hawkish Fed will be negative for the Dow Jones because it will send a signal about high-interest rates.
The four-hour chart shows that the Dow Jones index has been in a slow upward trend recently. Along the way, it has formed a small ascending channel that is shown in orange. The index also remains above the 25-day and 15-day smoothed moving averages. The Relative Strength Index (RSI) is at the neutral level of 60. Therefore, in my view, the index will likely keep rising this week as bulls target the YTD high of $34,255. However, a drop below $33,640 will invalidate the bullish thesis.
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