FTSE 100, DAX 30, S&P 500, Dow Jones – Next Week

FTSE 100, DAX 30, S&P 500, DOW JONES – EQUITIES OUTLOOK

  • Will the optimistic GDP data provide the FTSE 100 with a short-term boost?
  • DAX targets the EU rescue package and the USA earnings season.
  • S&P 500, Dow Jones might fall incase Covid-19 fatalities increase

DOW JONES INDEX

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Dow-Jones INDEX

S&P 500, Dow Jones – Bearish

The S&P 500 and Dow Jones heads into the Q2 earnings session with the slow growth of the FEDs balance sheet, implying reduced fiscal policy support. As shown in the chart below, the central bank has seen a reduction in its asset holdings for a month. The downtrend in the Federal Reserves (FEDs) efforts to ensure the credit markets are properly cushioned from the vibrant simulative nudge earlier this year amidst the COVID-19 outbreak might keep the wall street stock markets from setting the new highs.

This Nasdaq composite has been a worthwhile exception. This is because the traders will most likely expect the technology industry to fare better during this COVID-19 crisis. As a result, there is little doubt that it’s moderately elevated appraisal will be significantly evaluated during the current earnings session that gets underway with renowned financial organizations. These include Wells Fargo, Bank of America and JPMorgan. Wells Fargo just announced that it might be restricting and cutting down on some jobs.

USA COVID-19 infections have been on the rise in the past few days. However, this has not in any way affect the GDP growth outlook. Last week, there were a few states that started reporting more death rates. The deaths have not followed the trend in increased COVID-19 infections. If this changes, the lockdown will have to be re-imposed to manage any more risks of outbreaks affecting the economic growth and also the equities.

DAX 30 BEARISH OUTLOOK

Throughout the Atlantic, DAX 30, which is Germany’s key stock index, is without a doubt related to the basic developments from the United States. Keep in mind that the US is also the world’s biggest economy. The sudden rise in risk aversion in the US might spill over domestically. Focusing on additional regional economic developments, the ECB (European Central Bank) fiscal policy announcement will be made on Thursday. Investors are closely watching this space for any changes in their emergency securities purchase program.

Unanimous approval is desperately needed. As a result, the struggle might induce more aggressive risk aversion to incase the highly needed monetary support is jeopardized.

FTSE 100 BEARISH OUTLOOK

The FTSE 100, which is the UK’s key stock index, has also stalled along with the DAX 30. This has further been stressed out by HOW DAX 30 COMPANIES IS PERFORMING UNDER UNPRECEDENTED CIRCUMSTANCE SURROUNDING COVID-19. This is happening as the UK’s 2020 GDP predictions continue to decline, possibly describing the most recent declines as shown in the chart below.

More insights would be revealed in the domestic economic growth in the past one week. On Tuesday next week, the GDP is expected to grow by 5.3% m/m. This will be a significant rise from the wavering decline in April.

The global COVID-19 infections have risen, slowly increasing the 7-day MA. The possibility of easing the lockdown will undoubtedly control the equities.

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