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Morning Brief: Dow Jones, S&P 500, Nikkei 225, and DAX Spike in Early Trading

Global stocks are rising today as traders react to positive news about Trump. In the United States, futures tied to the Dow Jones and S&P 500 index are up by about 0.70%. In Europe, DAX index, FTSE 100, and Stoxx 50 futures are also up by 0.37%, 0.75%, and 0.35%, respectively. Similarly, in Asia, the Hang Seng is up by more than 1.25% while the Nikkei 225 is up by 1.15%.

On Friday, Donald Trump was rushed to Walter Reed Medical Centre in Maryland for treatment as his condition worsened. In statements on Saturday and Sunday, his doctors at the medical facility said that the president was making steady progress and that he could be discharged today. They also said that they are treating him using a drug by Regeneron and Gilead Sciences.

The indices are also rising because of the latest polling data. Polls released yesterday showed that Joe Biden had a 14-point lead nationally, which is the highest it has been in months. Analysts believe that a Joe Biden president will have mixed results for equities. For one, they expect that he will help reduce trade tensions with China. However, they are concerned about the likelihood that he will raise taxes.

Global indices are also rising because of the rising trend of deal-making. In a report, the Financial Times said that Italy’s Sis and Nexi were planning a merger that will create one of the largest fintech companies in Europe. In another deal, NEC announced that it would acquire Avaloque in a $2.3 billion deal. Blackline also announced its acquisition of Rimilia.

Meanwhile, crude oil price is rising today as investors react to news that Equinor has shut down four North Sea fields as workers strike. The shutdown will pull thousands of barrels of oil from the oil market. Investors are also optimistic about demand even as US rig count increases.

At the same time, gold and silver prices have fallen by more than 0.50% and 0.45%, respectively. That is partly because of the falling risks as Donald Trump makes progress.

Dow Jones technical outlook

The daily chart below shows that Dow Jones futures have bounced back after falling by more than 130 points on Friday. The index is trading at $27,875, which is slightly below the important resistance level of $28,000. The price has moved slightly above the 25-day exponential moving average. Most importantly, it is along the pivot point level that is shown in black.

Therefore, I expect the index will continue rising as investors focus on the first resistance at ~$29,145. On the flip side, a move below Friday’s low of $27,277 will invalidate this trend. It will mean that there are more bears in the market, who will be keen to test the first resistance level at $26,510.

Dow Jones Daily Chart

Dow Jones