DOW JONES, HANG SENG INDEX OVERVIEW:
- Dow Jones futures on a downfall due to pandemic worries, lessening chances of stimulus success.
- Republic of China’s Communist Party meeting starts off this week, focusing on the president’s ‘internal circulation’ method.
- The Hang Seng Index could experience a short-term temporary reversal in the price action, but the general trend stays on the positive side.
DOW JONES FUTURES OVERVIEW:
On Monday, Standard & Poor 500 and Nasdaq 100 futures went down by over 0.5% at the Monday opening, prompting a ‘risk-off’ alert to Asia-Pacific equities. A fast ascension in the amount of Covid-19 cases over the USA and more limiting rules for combating the spread imposed in the European Union could benefit health growth outlooks. In the meantime, chances for a USA stimulus aid before the election stay slim. Asia-Pacific equities could trade on lower limits in the midst of a pretty muted economic calendar on this day.
The States have over 85k registered cases and over 78.5k new diagnoses on October 23rd and 24th, which are record-breaking numbers. The amount of daily new coronavirus cases already went over the heights seen in the middle of July, making for a shaky economic situation.
On the macro side, the main marketplace happenings this week are:
- 26th October (Monday):
Chinese Communist Party Plenum
US New Home Sales (month-to-month)
- 27th October (Tuesday):
Industrial Profits in China (year-to-year)
USA Durable Goods Order, CB Consumer Confidence
- 28th October (Wednesday):
Australia’s level of inflation
Bank of Canada Interest Level decision
- 29th October (Thursday):
Bank of Japan Interest Rate decision
Germany jobless level, inflation level
US advanced third-quarter gross domestic product growth level, unemployment claims per week
ECB interest level decision and press conference
- October 30th (Friday):
Germany flash third quarter gross domestic product growth level
Spain flash third quarter gross domestic product growth level
European Union core inflation, the third-quarter gross domestic product growth level
US core PCE Price Index, University of Michigan consumer sentiment
Technically, in the middle of October, the Dow Jones index stepped into a consolidating period, and its short-term trend seems to be on the bear-side, as the graph displays. There is a direct support level at 28,040 – the Fibonacci retraction of 38.2 percent. 28,040 is also the location of its Fifty-Day Simple Moving Average line. A straight-away resistance rate of 28,390 is present – the Fibonacci retracement of 23.6 percent. Breaking over 28,390 can open up space, moving to the following resistance level at 28,960 – the former high.
The Moving Average Convergence Divergence indicator made for a “Death Cross” the previous week, and since then, the prices are falling. This indicates that a bear-like momentum is currently dominant. The scope of the Bollinger Band indicator has been narrowing in the last few days, leading to more consolidation.
Dow Jones Index – Daily Graph
HANG SENG INDEX OVERVIEW:
This week, in Peking, the Chinese Communist Party Plenum will set economic targets for the following 5 years. The President’s idea of “internal circulation,” aimed at rebalancing growth with domestic demand, could be the main focus of the plenum. The sectors to keep an eye on our tech, consume, renewables, and financials.
In the coming weeks, Chinese Fintech Ant Financial will be listed double in Shanghai and Hong Kong. The Fintech firm could turn out to be the biggest IPO to date, with a possible price in the range of 35-36B USD. It also sets the 1st time a big IPO is not priced in NYC.
Technically, the Hang Seng Index (HSI) broke over the 100-day SMA line and also exceeded the high of 24,900 in September. The general trend seems to be bullish as the Twenty-day went over the Fifty-Day SMA for a “Golden Cross”. At 25,065, an immediate resistance level can be located – the Fibonacci extension level is 61.8 percent, while the Fibonacci extension is 50 percent – with immediate support of 24,855.