- The Dow Jones climbed another 350 points on Thursday, gaining 0.8%.
- Markets are dealing with a lack of meaningful data by hitting the buy button.
- US PMI figures loom ahead on Friday, but Trump headlines dominate.
The Dow Jones Industrial Average (DJIA) continued its steady drift into the high end on Thursday, gaining 0.8% and adding around 350 points to the tally as investors broadly tilt into a risk on stance. United States (US) President Donald Trump took the opportunity to air some of his economic grievances during an appearance at the annual World Economic Forum (WEF) hosted in Davos, Switzerland. Investors brushed off the majority of the President’s structural incongruities, though his statements about demanding lower Crude Oil prices drew some attention from the commodity markets.
The economic data docket on Thursday was thin, giving investors little else to chew on except political headlines from the White House’s newest resident. The US S&P Global Purchasing Managers Index (PMI) figures are due on Friday, and they are expected to be mixed. However, PMI prints are unlikely to have any meaningful impact unless the final figures deviate wildly from market expectations.
President Donald Trump lashed out about a wide variety of topics during his appearance at the WEF’s annual gathering in Switzerland, colloquially referred to as Davos, the city that hosts the forum every year. President Trump reminded everyone listening that he intended to “obliterate” the US budget deficit, while somehow convincing the US Congress to pass “the largest tax cut in American history” at the same time.
Also on President Trump’s docket of things to cover was Crude Oil prices, which he intends to ask the Organization of the Petroleum Exporting Countries (OPEC) to find a way to lower, prompting a quick sell-off in barrel bids. OPEC has historically been known for putting in efforts to raise or stabilize Crude Oil prices, and it remains unclear how the world’s largest Crude Oil cartel would react or even comply with the claim.
President Trump also reiterated his offer for Canada to become a member state of the US, declaring that the US’ current trade deficit with Canada, which currently stands at around 4% of the total US trade overhang, is unsustainable. President Trump also floated a thinly-veiled reminder of possible plans for tariffs on EU goods imported into the US in retaliation for the EU treating the US “very badly”.
Dow Jones news
Most of the Dow Jones’ listed securities are drifting into the high end on Thursday as investors lean into a general improvement in risk appetite. The Travelers Companies (TRV) fell back 1.8% to lead the handful of losers into the red, declining to $242 per share as investors take profits following this week’s surge on better-than-expected revenue reporting. Caterpillar (CAT) rose 2.6%, tapping $408 per share and touching its highest bids since last November.
Dow Jones price forecast
Thursday’s gains put the Dow Jones Industrial Average on pace to close in the green for a fifth straight session, and the major equity index has gained ground in all but one of the last nine straight trading days. Bullish momentum is grinding its way back to record highs just north of 45,000, but first bidders will need to climb back above the 44,800 level.
Price action has extended firmly beyond the 50-day Exponential Moving Average (EMA) near 43,230, and the Dow Jones’ long-run trend of outpacing the 200-day EMA is still firmly in place. A pattern of higher lows is also firmly baked into the chart, and traders hoping for signals to get short will be forced to sit on the sidelines for the time being.
Dow Jones daily chart
Economic Indicator
S&P Global Services PMI
The S&P Global Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector. As the services sector dominates a large part of the economy, the Services PMI is an important indicator gauging the state of overall economic conditions. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for USD.
Read more.Next release: Fri Jan 24, 2025 14:45 (Prel)
Frequency: Monthly
Consensus: 56.5
Previous: 56.8
Source: S&P Global
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