American stocks rose for the first time in four days yesterday. The Dow Jones, S&P 500, and Nasdaq 100 indices rose by 0.52%, 1.05%, and 1.70%, respectively. The trend is continuing in the futures market, where the indices have risen slightly. This is mostly because of positive results from Nike and KB Home and the positive reception about Tesla’s battery day event. Also, investors are likely pleased with news that the White House and congress have reached a deal that will avoid a lockdown.
In Asia, indices are mixed, with the Hang Seng and Nikkei 225 down slightly. The Hang Seng weakness is mostly because of the banking sector, which has been embattled. Indeed, HSBC, Hang Seng Bank, and other banks are among the worst performers in the Hang Seng. The Nikkei 225 is probably falling because of the relatively weak manufacturing and services PMIs numbers from Japan. Elsewhere, in China and Australia, the Shanghai composite and ASX 200 areup slightly.
In Europe, futures are generally strong, with the DAX index, CAC 40, and FTSE 100 futures gaining by 0.30%, 1%, and 1.05%, respectively. These indices are continuing the rally that started yesterday and are likely reacting to the action in Wall Street yesterday.
In other assets, crude oil price is sharply lower today as traders react to the inventories data from the United States. According to the American Petroleum Institute (API), inventories rose by more than 0.69 million in the previous week. Analysts were expecting the inventories to fall by more than 4 million barrels. Later today, the EIA will release its inventories data. Analysts expect the data will show that the inventories fell by more than 2 million barrels.
The same weakness in commodities extended to the precious metals, where gold and silver prices fell by more than 1.40% and 4.76%, respectively. In currencies, the dollar index is up by more than 0.20%.
The daily chart shows that the Dow Jones futures are up for the second straight day today. The index is trading at $27,414, which is slightly higher than this week’s low of $26,690. The price is still below the ascending trendline and the 20-day weighted moving average.
Therefore, even with the bounce today, I suspect that the downward trend will remain until the index retests the support at $26,000. However, if it re-enters the ascending trendline, it will send a signal that bulls have taken over. As such, it will likely head higher to the resistance at $29,000.
