US Stocks end in synchronized positive territories ahead of the ECB

  • The DJIA notched its sixth-straight gain, while the S&P 500 closed firmly higher for the fifth time in six sessions
  • All eyes now turn to the European Central Bank, (ECB). 

U.S. stocks ended higher on Wednesday, anticipating an easier money cycle in central bank policies ahead of Thursday's ECB. The DJIA notched its sixth-straight gain, while the S&P 500 closed firmly higher for the fifth time in six sessions while the Nasdaq broke up out of its three-day losing streak. The DJIA added 227.61 points, or 0.9%, to 27,137.04, ending above 27,000 for the first time since July while the S&P 500 index added 21.54 points, or 0.7%, to 3,000.93. The Nasdaq Composite index gained 85.52 points, or 1.1%, to 8,169.67.

US data

The US PPI lifted 0.1% m/m in August as the cost of services offset the drop in the price of goods. "Core PPI was up 1.8% in the 12 months to August. Despite this inflation measure coming in stronger than expected the Federal Reserve is still expected to cut interest rates next week – a decision the market has now fully priced in," explained analysts at ANZ Bank 

ECB outlook

Eyes now turn to the ECB. "The market is expecting a strong stimulatory package. Interest rates are expected to drop 10 to 20bp with market expectations weighted towards 10bp. QE worth 30 to 50 billion euros per month for the next 9-12 months is expected, along with a tiered deposit rate and dovish forward guidance," the analysts at ANZ Bank explained. 

DJIA levels

The DJIA has printed another higher high while climbing through the 26900s and falling just shy of the 27200s targets, and specifically, 27398 level. On the flip side, the 200-DMA is located at 25649 below the 21-DMA that sits just above the pivot. Further below lies the May and Jun lows in the 24700s as a double-bottom target. 

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