Nasdaq
The Dow Jones finished yesterday’s trading 280.2 points or 1.01% lower at 27,502.8. Risk aversion swept through markets and only five out of the thirty stocks tracked by the Dow finished in the green.
The only gainers were: Merck (+0.39%), Verizon (+0.30%), Proctor & Gamble (0.19%), Coca-cola (+0.09%), and Visa (+0.06%). On the other hand, losses were led by Intel (-2.76%), Dow Chemical (-2.52%), Caterpillar (-2.03%), 3M (-1.84%), and Apple (-1.78%).
One of the biggest headlines in yesterday’s US stocks was the news is that current CEO of Alphabet, Larry Page, will be stepping down. He will be taken over by Sundar Pichai will maintaining his role as CEO for Google too.
The sell-off across equities markets were mostly triggered by recent developments in the US that could sour negotiations. For one, US President Donald Trump said that he is not in a hurry to ink a phase one deal in 2019. People close to negotiations say that the President is critical to details and wants to make sure that the US does not get the losing end of the deal.
China has also condemned the Uighur Act of 2019. The bill which just got passed in Congress aims to toughen its stance on Xinjiang. Over a million Muslims who are mostly Uighur are being held in the area in re-education camps. According to Chinese policymakers, the US should stop meddling with its domestic issues. If you remember, China has previously warned that they may retaliate by imposing tariffs on US-imported goods.
Later today, a couple of high-impact reports from the US are due. At 1:15 pm GMT, the ADP non farm employment change report is expected to print at 137,000. This report is privately produced and aims to predict the official NFP report which is due on Friday. Then at 3:00 pm GMT, the ISM non-manufacturing PMI for November is eyed to print at 54.5. Readings above 50.0 are taken to mean that the services industry is expanding.
If risk aversion continues today or if data from the US disappoints forecasts, the Dow Jones could continue trading lower. The next support level is at 27,053.00 where the index previously made highs in October.
On the other hand, positive development on the US-China trade negotiations and better-than expected data could push US equities higher. If this turns out to be the case, we may see Dow Jones trade above 28,000 again.Download our latest quarterly market outlook for our longer-term trade ideas.