dow jones
Dow Jones futures indicate a positive opening today ahead of the Feds monetary policy decision and the new economic projections of the U.S. economy. Analysts expect the Federal Reserve to keep the interest rates unchanged, but the focus will be on the quarterly forecasts for the inflation, GDP and unemployment. President Trump in a speech yesterday raised hopes for a coronavirus vaccine saying it could be ready in the upcoming three or four weeks.
Before the Fed decision, investors will check the August retail sales data with estimates looking for an increase of 1.1%, compared to a 1.2% rise in July.
The Organization for Economic Cooperation and Development in its latest economic outlook, expects that the global economy will shrink by 4.5% in the full year better than the previous forecast for a 6% contraction.
In corporate news, Apple presented yesterday its new products and services, including the new iPad Air and the Apple Watch 6, which has a function to measure blood oxygen levels. FedEx reported a strong quarter with earnings of $2.18/per share beating consensus estimates, boosted by the online shopping spree.
On the trade war front, the World Trade Organization (WTO) ruled that the tariff imposed in 2018 by the U.S. on Chinese goods was against the international trading regulations.
The fear and greed index continues higher, reaching the 59 mark as the recent rebound in big tech companies continues. The index dropped at 55 the previous week after the correction from five-month highs at 77. Sentiment also boosted on speculation that the Federal Reserve will revise its forecasts upward for the US economy while it might add further stimulus to the economy.
Dow Jones index finished yesterday at 27,995 close to daily lows after the reversal in Apple stock. Dow Jones is 1.90% lower since the beginning of 2020 while the previous week added 1.80%. Bulls are in control of the Dow index, and the pullbacks should be considered as a buying opportunity.
Support for the Dow Jones index stands at 27,687 the low from September 14, but the critical level for bears to watch on the downside is the 50-day moving average at 27,353. A break below would invalidate the positive momentum.
On the upside, the top from yesterday is the first hurdle at 28,231. Next resistance would be met at 28,557 the high from September 4. The recent highs at 29,206 is the next supply zone.
