Nasdaq 100 Climbs on Stimulus Hopes, Netflix Misses, Nikkei 225 May Rise

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