September 24, 2020

Dow Jones Futures Set To Extend Losses

Dow Jones Futures Set To Extend Losses

Global Stock Market Today

The global stock futures are facing a brutal week. Yesterday, we saw another intense sell-off as investors continue to worry about the surge in coronavirus cases and how it is going to impact the economic recovery. There are survey reports that are already indicating that that the targeted lockdowns are hindering the economic recovery. In terms of a safe haven trade, the precious metals are completely out of luck, as the strength in the gold price is heavily influencing the price of the metals. 

Over in Asia, red was the dominant colour among Asian indices. The HSI index fell 1.97%. The Nikkei stock index also moved lower by 1.1.7%, while the Korean Kospi declined 2.74%. The Shanghai index decreased by 1.53%. 

Dow Index and S&P500 Index: Market Breadth

The Dow Jones’ market breadth lost even more momentum yesterday. 57% of the Dow Jones stocks traded above their 200-day moving average yesterday. This is a change of -3% from the day before.

The S&P 500 stock breadth also continued to lose steam, with 51% of shares trading above their 200-day moving average. This is a change of-2% from the day before.

Dow Jones and S&P 500 Futures Today

The Dow Jones futures are trading higher by 20 points. It is highly likely that we may see another down day today. Investors will continue to monitor the Fed Chair’s testimony and keep looking for some new information. So far, the Fed Chairman, Jerome Powell is maintaining the view that the future looks immensely uncertain for the U.S. economy.

The Dow Jones futures have dropped below the 100-day SMA on the daily time frame, further strengthening the bears. This is because the Dow price was already trading below the 50-day SMA and the only hope is that the price will bounce back up from its 200-day SMA. Looking at the current momentum, it looks highly unlikely.

The S&P 500 futures, the wider representation of the U.S. equity market are also trading below the 100 and 50-day SMA on the daily frame. The price has already broken yesterday’s low, and it is likely that it will continue its journey towards the 200-day SMA. The immediate support is at 3182, and a break of this will open the door towards the net support, which is at the 3054 level. 

Stock Market Rally 

The S&P 500 stock index gave up all of its recent strength and continued its downward journey. The index closed sharply lower by 2.37%. The tech sector led the index lower, and all the 11 sectors closed lower. 

Nike stock contributed the biggest gain, soaring 8.76%. Albemarle stock was the largest drag; it fell by 15.6%. The S&P 500 stock index is up 4.4% during this quarter.

The Dow index declined yesterday, and the Dow stocks moved the index lower by 1.92%. 2 stocks of the Dow Jones Index increased in value, and 28 shares of the Dow index moved lower. Nike stock advanced higher by 4.76%, and was the biggest mover for the Dow, while Salesforce stock dropped 4.76%, the biggest drag for the Dow Jones industrial average index.  

The NASDAQ composite, a tech-savvy index, declined 3.16% yesterday.