The Dow Jones index closed 165 points lower on Wednesday and is pointing to another 300 point loss in the futures market after hopes for a quick resolution to the stimulus package faded.
Treasury Secretary Steven Mnuchin said that a second stimulus package was unlikely to happen before the election, saying:
“At this point getting something done before the election and executing on that would be difficult, just given where we are and the level of detail, but we’re going to try to continue to work through these issues”.
Disappointing earnings from Bank of America and Wells Fargo also weighed on stocks with the stocks off 5.3% and 6% respectively. Bank of America fell on disappointing revenues for the third quarter. The company said its revenue came in at $20.5bn. Analysts had expected a $20.8 billion. The company also saw a 16% earnings drop on an annual basis. Wells Fargo said its earnings per share were 42 cents per share, compared to analyst expectations for 45 cents per share.
European stocks are being dragged lower by new virus restrictions in France with curfews in Paris and other major cities. A second wave of the virus has already seen further lockdowns in the U.K. and this has investors worried. The EU summit sees the crunch Brexit talks and this will also weigh on risk sentiment. Morgan Stanley is the latest bank to release earnings today before the market opens.
The Dow Jones continues to fall from the failure of resistance near the 28,800 level and the index saw a bearish close into 28,250. The support ahead is at 27,630, which was a high in June. If the market gets through there then 26,500 opens up a larger double top pattern. The market needs to get above 28,800 to confirm a new uptrend. Investing Cube team is currently available to assist all levels of traders with the Forex Trading Course or through one-to-one coaching.
