The ECB Decision
The well-telegraphed message by the European Central Bank about their monetary policy helped the Euro currency yesterday. The bank made it clear back in October that it is going to expand its stimulus programme to provide extra support for the Eurozone economy. So the only factor that was going to influence the currency strength adversely was going to be a more dovish stance.
The ECB increased its Pandemic Emergency Purchase Programme by $500 billion, against the market expectation of $400 to $600 billion estimate. In addition to this, the bank also extended the program to March 2022 – Again overwhelming the market as the estimate was for the program to finish at the end of 2021.
The Euro’s Move
We have seen a massive rally for the Euro against the dollar since yesterday and the currency is still maintaining those gains.
The Asian stock market traded mostly lower on the final trading day of the week. At the time of writing this, the Nikkei index was trading with a loss of 0.37%. The Shanghai index fell to 1.11%, while the HSI index jumped higher by 0.33%. The ASX index declined by 0.61%.
Dow Jones and S&P 500: Market Breadth
The Dow Jones’ market lost some momentum on to its strength. 89% of the Dow Jones stocks traded above their 200-day moving average.
The S&P 500 stock breadth is maintaining its bullish momentum. 90% of the shares traded above their 200-day moving average.
Dow Jones Futures Today
The Dow Jones futures are trading lower by 40 points today. In terms of economic data, investors will be looking at the Core PPI data. The forecast is for 0.2%, while the previous reading was at 0.1%.
The Dow Jones futures are set to record three consecutive days of losses. This is the longest losing streak since November 11th. Having said that, the Dow price is still trading above the 50, 100 and 200-day SMA on the daily time frame. The RSI is still close to its overbought zone and this means that more sell-off can happen.
The S&P 500 futures, which represent the broader stock market, have also recorded the longest losing streak since November 11th. On the 30-minute time frame, the price action shows that the bulls still need a lot more help as the price is trading below the 50, 100 and 200-day SMA. It is important to keep in mind that if the price breaks above the 50-day SMA on the 30-minute frame and stays above it, we could see the price moving back towards the all-time high.
Stock Market Rally
The S&P 500 stock index closed in negative territory yesterday; the index fell 0.13%. The energy sector led the index lower – 5 out of 11 sectors closed lower.
The Dow index also fell yesterday; the Dow stocks moved the index lower by 0.23%. Twenty-three shares advanced while seven shares closed lower.
The NASDAQ composite, a tech-savvy index, closed higher by 0.54 yesterday.
S&P 500 Leaders and Laggards: Occidental and Centurylink
Occidental Petroleum stock contributed the biggest gain, soaring 9.90%. CenturyLink Inc was the largest drag; it fell by 4.019%. The S&P 500 stock index is up 9% so far this year.
Dow Jones Leaders and Laggards: CVX and Verizon
CVX provided the biggest help for the Dow Jones; it advanced by 3.21%, while Verizon was the largest decliner, it fell by 1.54%.
The crypto king is struggling to hold on to its gains. Bitcoin trading is losing its momentum fast. The price has fallen below the 18K mark once again and it is likely that we may see the price moving all the way to its next support of 16,500.