Daily Market Report: Dow, Nasdaq, & DAX
Tech stocks outperform despite Facebook fine and Tesla losses, Amazon and Google up next.
DOW: Retracing off the highs as despite tech and financials outperforming
US data yesterday was a disappointment, and despite both tech and financial stocks outperforming this index finished lower for the session, opting to retrace off the highs but not significantly enough to undo its bull trend technical overview that continues to stall heavily and offering a buy opportunity off yesterday’s 1st Support level in the process. More earnings from tech giants will be released today, and that’ll keep the focus on the outperforming Nasdaq over the Dow, though note whether pharmaceutical stocks come under pressure if unconfirmed reports of a US Presidential executive order to cut prices sold to Medicare are true. Any price drop off the highs is enticing fresh retail shorts into closing out, as was the case yesterday with the heavy short bias dropping 3% to 73%.
NASDAQ: Tech stocks outperform with Amazon and Alphabet up next
Facebook posted better than expected results despite having to pay the heft $5 billion fine to the FTC, while Tesla disappointed and sent the electric carmaker’s price plummeting 11% in after hours. Today’s another big day for the tech sector with both Amazon and Alphabet (Google) reporting, with the former effected by what Treasury Secretary Mnuchin said that the tech giant "destroyed the retail industry across the United States". As it stands, the index’s bull trend technical overview remains intact ahead of the fundamental data, and with nearly all its technical indicators flashing green. Meanwhile, while retail short bias has dropped 3% in the Dow on profit-taking, it has risen here by 3% instead as the price gains squeeze short traders and entice longs into closing out, with retail bias now at a heavy short 76%.
DAX: Attention turns to the ECB to see if potential easing can justify current equity valuations
Daimler’s earnings yesterday showed a loss despite an increase in revenue, though its share price did finish higher for the day with Deutsch Bank lagging the most. And while there’s more earnings today with VW, it’s the ECB that’ll likely effect equity prices the most, as much of the recent gains were on the back of expected monetary easing. PMI figures for Germany (and the region) were a serious disappointment, and hence is forcing the European Central Bank into at the very least offering some sort of future commitment. German 10-year yields have edged back further into negative territory and are at -.375%. From a technical standpoint – and it’s a big fundamental day – there’s been a shift in its overview to an initializing bull trend where most of its technical indicators are now bullish, though keep in mind that the catalyst has been expected easing and hence any disappointment on that front could easily cause recent gains to swiftly be undone.
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