- Summary:
- The Dow Jones, Nikkei 225, and the DAX index declined in early trading while the Hang Seng index rose ahead of Ant Financial initial public offering
American stocks are falling in the futures market as traders remain concerned about stimulus and the upcoming US election. The blue-chip Dow Jones is down by more than 130 points while the Nasdaq 100 and S&P 500 are down by more than 0.40%. The CBOE VIX index, has jumped by almost 1%.
US futures drop
The biggest concern among traders is the upcoming general election in the United States. With two weeks to go, investors are worried about the outcome and the increasing possibility of a contested results. Analysts are concerned that the US will go to an election without a stimulus deal, which they believe is required to cushion the economy.
Investors are also focusing on the ongoing earning season. Yesterday, the biggest focus was on Tesla, which delivered quarterly revenue of more than $8.77 billion, beating the analysts’ forecast of $8.26 billion. The firm delivered a profit for the fifth consecutive month.
Verizon made more than $31.59 billion, missing the analysts’ forecast of $31.5 billion while Abbott Labs made more than $8.5 billion in revenue.
Later today, the Dow Jones and other indices will react to corporate earnings from Intel, Coca-Cola, AT&T, and Danaher, among others.
In Europe, futures tied to the DAX index, FTSE 100, and CAC 40 have fallen by more than 0.40%. Similarly, in Asia, the Nikkei 225 has fallen by 0.70% while the Hang Seng has jumped by 0.15%. The Hong Kong benchmark has jumped as investors wait for the upcoming Ant Financial IPO. The company, which was founded by Jack Ma, is expected to hold the biggest IPO in the next few weeks in Hong Kong.
In Japan, the Nikkei 225 index fell as investors reacted to news that ANA, the embattled airline expects to report another loss for the quarter. It expects to make a loss of more than ¥530 million. The announcement came a day after Hong Kong national courier, Cathay Pacific decided to axe its Dragon brand.
Dow Jones technical outlook
The four-hour chart shows that the Dow Jones has been under pressure starting from October 12, when it reached a high of $28,961. This week, the price moved below the support of $28,150, which was the level of the previous double bottom. It also remains below the 15-day and 25-day exponential moving averages and below the 61.8% Fibonacci retracement level.
Therefore, I suspect that the index will remain being under pressure as bears aim for the 50% retracement level at $27,848. On the flip side, a move above $28,500 will invalidate this trend.
Dow Jones technical chart
