Major equity indexes sustained their recent bullish momentum on the first trading day of the fourth quarter and advanced to fresh record highs.
Today's data from the U.S. pointed to a strengthening economy as the business activity in the manufacturing sector continued to expand. Moreover, hurricanes Harvey and Irma's negative impact on the supply chains caused by hurricanes Harvey and Irma pushed raw material prices higher, likely resulting in higher PPI in near-term. Commenting on today's market action, "today is a continuation of potential enthusiasm on the tax front and the data this morning. That was a good manufacturing number," Scott Wren, senior global equity strategist at Wells Fargo Investment Institute in St. Louis, Missouri, told Reuters.
Moreover, reports of former Fed Governor Kevin Marsh, a known hawk, meeting with President Donald Trump and Treasury Secretary Steven Mnuchin for a potential nomination as the next Fed chair boosted the financials. The S&P 500 Financials Index (SPSY) finished the day higher 0.33% higher.
On the other hand, falling crude oil prices on increasing OPEC output in September weighed on energy shares with Exxon Mobil dropping 0.43%. The barrel of West Texas Intermediate settled at $50.59, losing more than $1 on the day.
The Dow Jones Industrial Average added 153.23 points, or 0.68%, to close at 22,559.11. The S&P 500 rose 9.8 points, or 0.39%, to 2,529.16 and the Nasdaq Composite gained 20.61 points, or 0.32%, to 6,516.57.
DJI technical outlook
Valeria Bednarik, Chief Analyst at FXStreet, writes, "Dow's daily chart shows that the RSI indicator accelerated north, currently at 75, while the Momentum lags, consolidating anyway within the bullish territory. Furthermore, the index continues developing above bullish moving averages, all of which favors further gains ahead. Shorter term, and according to the 4 hours chart, the index maintains its strong bullish bias, also advancing sharply beyond bullish moving averages, and while technical indicators remain within extreme overbought territory, anyway presenting upward slopes."
According to the analyst, supports could be seen at 22,500 22,456 and 22,403 while resistances align at 22,580, 22,625 and 22,660.
Headlines from the NA session
- Forex today: firm data signals supporting the case for a Fed hike in December
- Market wrap: US dollar index is up 0.5% - Westpac
- US ISM: recovery continues but strong numbers partly due to hurricanes - Danske Bank
- US NFP: Harvey and Irma likely to knock down payroll growth - Wells Fargo
- Fed's Kaplan: 10-year yield is a natural constraint on how high Fed can raise rates
- Fed's Kaplan: We are going to have to look hard if we should raise rates in December
- Atlanta Fed: GDPNow model forecast for real GDP growth in Q3 rose to 2.7%
- US: Economic activity in the manufacturing sector expanded in September - ISM
- US: September PMI signals further improvement in manufacturing conditions - Markit
- US: Construction spending during Aug 2017 was estimated at an annual rate of $1,218.3 bln
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.