Wall Street in the red on heightened geopolitical risks
|- The Dow Jones Industrial Average, DJIA, lost 143 points, or 0.5%, to end near 27,077.
- The S&P 500 dropped 0.3% to end around 2,998.
- The Nasdaq Composite was 0.3% lower to end around 8,154.
US stocks on Wall Street were on the back foot on Monday in a risk-off environment while investors took to the sidelines, rattled by the attacks on the Saudi Arabian oil facilities over the weekend, renewing geopolitical fears over the region. The Dow Jones Industrial Average, DJIA, lost 143 points, or 0.5%, to end near 27,077, while the S&P 500 dropped 0.3% to end around 2,998. The Nasdaq Composite was 0.3% lower to end around 8,154.
A reduction of 5.7mb/d is significant loss for the oil markets but the geopolitics of it all could be far more significant for financial markets in general and the economic implications are numerous and add to an already fragile global economic backdrop. "Heightened geopolitical tensions are likely to add to investor caution," analysts at ANZ Bank argued.
US data
Meanwhile, markets are getting set for the Federal Reserve this week and manufacturing is going to b a big component in the decision making processes through the rest of this year and next's.
The analysts at ANZ Bank explained that the US Empire State manufacturing index slipped to 2.0 (mkt: 4.0) in September from 4.8 in August. "New orders moderated to 3.5 from 6.7 and shipments fell to 5.8 from 9.3. But it wasn’t all one-way traffic. Employment gains partly offset those declines, rising to 9.7 from -1.6. There was also a rise in prices paid (29.4 vs. 23.2) and received (9.2 vs. 4.5), in line with the acceleration in core CPI inflation last month. That said, the 6-month ahead activity index fell to 13.7 from 25.7, so while the Empire index continues to run above the national ISM measure signals of further softening in the pipeline remain."
DJIA levels
Technically, the index may continue to struggle from here if obeying the bearish doji candle formation through the 27200s and should the risk profile of markets continue to deteriorate, bears can target the 21-DMA, the 50 and then the 200 DMA. Further below lies the May and Jun lows in the 24700s as a double-bottom target.
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