Daily Market Report: Dow, Nasdaq, & DAX
DAX retail bias shifts to heavy long on short profit-taking, technical overview shift as ECB inaction puts European equities at risk.
DOW: Stalling at the highs as investors anticipate a reversal in Fed monetary policy
It’s all about the Fed this evening with US-China trade talk sentiment this morning dipping, and markets are continuing to price in a 0.25% rate cut. Much of the recent gains in US equities have been on the back of anticipated central bank easing, and any disappointment on that front could put those gains at significant risk and forcing US indices to suffer a similar fate that European indices have been facing following ECB inaction last week. Going into tonight’s event retail traders are heavy short at 71%, while institutional bias is extreme long at 86%.
NASDAQ: Apple outperforms in after hours on diversification and better projections
Apple’s earnings results while disappointing on the iPhone front were seen as a boon to investors as growth in other areas emphasized diversification away from the tech giant’s smartphone sales and improved projections, taking its price higher in after hours. Overall, the tech index remains near the highs, and like other US indices (and global indices as well) awaiting the Fed’s decision this evening that isn’t just about whether recent gains in price can be sustained, but set the tone for the remainder of the year of what the Fed will be focusing on and what will cause it to react. Retail bias here is similar to that of the Dow at a heavy short 70%, while institutional bias is far more modest at a majority long 60% than the Dow’s extreme long bias of 86%.
DAX: Sentiment shift and technical overview shift following ECB inaction
European equities finished more heavily in the red compared to their US counterparts, and Asia is down as of this morning as US-China trade talks resume with no announcement yet to lift investor spirits. Meanwhile, the DAX’s plummet wasn’t just noteworthy on the technical front as ECB inaction undoes much of the gains that were made based on expected monetary easing, but also in terms of sentiment, with retail bias shifting from a previous majority short 61% to a now heavy long 68% on short profit-taking. But don’t think US indices are out of the park just yet, as the Fed is up next and if it disappoints, we could see similar if not more sizeable drops in US indices.
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