October 22, 2020

European Stock Futures Drift Lower

European Stock Futures Drift Lower

Stock Market Today

Global markets are retreating today as investors react to the top American intelligence report, which says that Iran and Russia could be attempting to interfere in the upcoming U.S. presidential elections.

Investors have also become less hopeful about the possibility of a second stimulus aid package, before the U.S. election, as lawmakers once again failed to deliver anything meaningful yesterday.

However, there are still hopes for another stimulus package as the conversations are still taking place between House Speaker Nancy Pelosi and the U.S. Treasury Secretary Steven Mnuchin.

The Asian stock market closed lower as investors responded to the IMF report, which downgraded the growth forecast for Asia.

The Shanghai index decreased by 0.53%. The Korean Kospi index also moved lower by 0.84%, while the Nikkei index declined 0.68%. The HSI index fell by 0.02%.

Dow Jones and S&P 500: Market Breadth

The Dow Jones’ market breadth lost more strength yesterday. 60% of the Dow Jones stocks traded above their 200-day moving average. This is a change of -3% from a day earlier.  

The S&P 500 stock breadth took a heavy beating yesterday. 60% of the shares traded above their 200-day moving average. This is a change of -9% from a day earlier.  

Dow Jones Futures Today

 The Dow Jones futures are trading higher by 124 points today. Today, we will be getting the CB leading index and Existing Home Sales data. The Existing Home Sales forecast is 6.02M against the previous reading of 6.0MM. As for the CB Leading Index the market is expecting a reading of 0.8% while the previous reading was for 1.2%.

The Dow Jones futures are showing that bulls have lost some control of the price as the Dow price has moved below the 50-day SMA on the daily time frame. This particular move was coming, and the hope is that the price stays above the 100-day SMA. The RSI has also started to move lower, and it is currently trading at 48, still far away from an oversold zone of 30. The immediate support level is 27909, and the resistance is at 28464. 

The S&P 500 index, which represents the wider stock market, has also confirmed weakness as the price is in battle in with the 50-day SMA. There is a possibility that we may see a bounce back up from this level as the S&P 500 is still trading above the 100 and 200-day SMA on the daily time frame, which confirms the bull trend. The immediate support is at 3337, while the resistance is at 3530.

Stock Market Rally

The S&P 500 stock index fell yesterday amid election uncertainty. The index declined by 0.22%. The energy sector once again led the index lower, 9 and out of 11 sectors closed lower. 

The Dow index also moved lower yesterday; the Dow stocks moved the index lower by 0.35%. 21 shares of the Dow fell, and 9 closed higher. 

The NASDAQ composite, a tech-savvy index, dropped by 0.28% yesterday. 

S&P 500 Leaders and Laggards: Twitter and Etsy

Twitter stock contributed the biggest gain, soaring 8.39%. Etsy stock was the largest drag; it fell by 8.14%. The S&P 500 stock index is up 6.3% so far this year.

Dow Jones Leaders and Laggards: Travelers and Goldman Sachs

Travelers stock advanced higher by 5.83% and was the biggest mover for the Dow, while Goldman Sachs stock declined 2.46%, the biggest drag for Dow Jones Industrial Average index.