Dow finishes down ahead of Q1 earnings kickoff
Retail short bias drops in the Dow as shorts take profit.
Dow Technical analysis, overview, strategies, and levels
Earnings season kicks off with Dow components' JPMorgan Chase today – one of the 'Big Four' US banks that underperformed yesterday – as well as Johnson & Johnson. The index finished the session yesterday in the red alongside the S&P 500, and hence most of its components were in the red with losses led by Caterpillar and American Express, while of the few gainers Walmart was on top followed by Intel and Apple. Most US sectors were suffering contraction chief amongst them real estate and financials, but tech, consumer discretionary and staples managed to avoid losses during the session. More reports are emerging regarding companies (both investment grade and junk status) trying to get more liquidity and either taking on loans or issuing fresh debt, and talk is already emerging of reopening the economy as cases and casualties show a slower rate of increase.
IG client* and CoT sentiment for Dow
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
Unlike the Dow and S&P 500 which both finished the session in the red, the Nasdaq was in for a slight green day thanks to Amazon’s share price rising as it hires 75,000 more people due to the surge in demand for online orders. Tesla and Netflix were also amongst the outperformers, and where amongst the components finishing in the red included what have been some of the usual suspects such as Marriott and Expedia and led by American Airlines with a 7.59% loss, just as latest reports say that large airlines could accept the $25b government coronavirus grant/loans as early as today, which in turn could make airline share prices more volatile upon the release of any confirmation.
IG client* and CoT sentiment for Nasdaq
In earnings, Fastenal will be releasing its figures today. As for sentiment, given the Nasdaq's price didn't drop but rose instead, majority short bias has risen to 63%.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
The focus this week will be on earnings, and a lack thereof for the German DAX means US indices may lead in terms of overall appetite for risk-related products. With the holidays outside the US concluding, Asia was in the green this morning, and Chinese trade data showed a drop in exports but an overall trade surplus. While there are signs it is well past its peak for most of East Asia, for Europe an improvement in numbers has yet to translate into a reopening of the economy, even if Germany has fared better in terms of casualty rates thus far when it comes to weathering the coronavirus storm.
IG client* and CoT sentiment for DAX
DAX chart with retail and institutional sentiment
*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am.
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