Dow Jones
The Dow Jones has remained resilient. But will recent concerns about the US-China trade deal jeopardize its gains? On Wednesday, the index managed to hold on to its gains and stay above the 28,000 psychological handle. It finished with a 0.15% or 42.3 point-gain at 28.164.0.
The top three stocks were: Apple which posted a 1.34% uptick as excitement built up for it’s Black Friday live event. Home Depot came in second with its 1.01% uptick, and Visa came in third with a 1.00% uptick. On the other hand, losses were led by Boeing which was down 1.48%. The drop in the airlines company is due to reports that it may not be allowed to re-launch the Boeing 737 in December. IBM was also down by 0.98% and so was Dow Chemical with a 0.71% loss.
Most Asian markets were in the red yesterday as risk aversion dominated market sentiment. The Hang Seng for instance is down close to 500 points. Meanwhile, the Nikkei 225 finished 0.49% lower.
Investors’ fears were triggered by US President Donald Trump who signed the HK rights bill into law. The Chinese had earlier warned that they would retaliate when the bill was passed in the US Senate. Now there is a wide sense of concern that China may impose its own tariffs on US-imported goods. More importantly, the move is seen to hinder negotiations between the two countries as they try to finalize a deal.
There are no US reports due today. This means that market investors will likely take their cue from market sentiment. Updates on the ongoing negotiations will probably cause volatility. In fact, we have yet to hear from China regarding their response to Trump’s move. An official statement from the country is what all market participants are waiting for now.
Connecting the lows of October 31 and November 20, we can see that the stock index is on an uptrend as evidenced by connecting the higher lows through the rising trend line. If risk appetite picks up, we can probably see the Dow Jones maintain its gains above the 28,000.0 psychological handle. It can easily post new historic highs on news that China will let Trump’s move slide. On the other hand, risk aversion on talks that a deal may not push through could send stocks lower to test support at the rising trend line around 27,990.0.Download our latest quarterly market outlook for our longer-term trade ideas.