NASDAQ 100, NIKKEI 225 INDEX OUTLOOK:
- Nasdaq 100 futures climbed on early Wednesday, rebounding from an instantaneous assist at 11,650
- Focus remained on the progress of US stimulus talks, whereas robust earnings might cushion the draw back
- Nikkei 225 index opened mildly increased, forming an “Rising Wedge” on the every day chart
Nasdaq 100 Index Outlook:
Wall Street futures prolonged positive aspects throughout early Asia buying and selling hours, in anticipation of development within the US aid bundle after Home Speaker Nancy Pelosi set a deadline to approve the stimulus proposal. Netflix’s huge earnings miss appeared to have little impression on the general market sentiment, whereas a majority of company America smashed consensus forecasts’ with upbeat Q3 outcomes.
On the macro entrance, as we speak’s launch of UK and Canadian inflation knowledge, alongside a speech by ECB President Christine Lagarde, shall be carefully watched by foreign exchange merchants. The EIA may also report a string of crude oil stock knowledge which will set the tone for the power sector. Learn extra on our economic calendar.
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What is the road ahead for equities this quarter?
The US corporate earnings continued to fare properly regardless of sporadic misses. On Tuesday, 15 out of 17 firms launched better-than-expected earnings (desk beneath), except Synchrony Monetary and Netflix. Netflix’s Q3 outcomes got here sharply beneath forecasts when it comes to earnings-per-share (EPS), new subscribers and ahead steerage as a consequence of a drastic slowdown in sign-ups over the summer season. Netflix’s share worth to plunged greater than 5% after market shut. Nonetheless, the general earnings image stays upbeat, which can shelter inventory markets in opposition to election and stimulus dangers.
Sector-wise, 10 out of 11 S&P 500 sectors closed within the inexperienced, with 70% of the index’s constituents ending increased yesterday. Power (+1.13%), financials (+0.82%) and communication companies (+0.80%) had been among the many higher performers, whereas shopper staples (-0.11%) and healthcare (+0.13%) had been lagging.
S&P 500 Index Sector Efficiency 20-10-2020
Supply: Bloomberg, DailyFX
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Why do interest rates matter for currencies?
Technically, the Nasdaq 100 index seems to have entered a consolidative interval after the formation of a bearish “AB=CD” sample (chart beneath). The near-term development has probably turned bearish as steered by the formation of a “Dying Cross” within the MACD indicator. A right away assist degree might be discovered at 11,650, the place the 38.2% Fibonacci retracement and the 20-Day Easy Shifting Common (SMA) line overlap. Breaking beneath 11,650 might open room for extra losses in the direction of the following assist degree at 11,470 – the 50% Fibonacci retracement.
Within the medium time period, the current pullback seems extra like a technical correction, which can set the ground for increased highs. Each the 50- and 100-Day SMA strains stay upward-sloped, suggesting that the medium-term bull development stays intact.
Nasdaq 100 Index – Each day Chart
Nikkei 225 Index Outlook:
Japan’s Nikkei 225 index opened 0.22% increased at 23,610, as merchants scrutinize the progress of a second US stimulus bundle. Sturdy US company earnings and stimulus hopes might set a constructive tone for Asia-Pacific buying and selling, whereas merchants await inflation knowledge from the UK and ECB President Lagarde’s speech later as we speak.
Technically, the Nikkei 225 index has probably shaped a “Rising Wedge” on its every day chart, with the 20-, 50- and 100-Day SMA strains all trending up steadily over the previous few months. A right away resistance degree might be discovered at 24,000 – the earlier excessive seen in mid-February 2020. The 20-Day SMA might be perceived as a dynamic transferring assist degree.
Nikkei 225 Index – Each day Chart
( 15:10 GMT )
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— Written by Margaret Yang, Strategist for DailyFX.com
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