Clash in Europe to send U.S stock lower

Italy’s anti-establishment government widened the budget deficit for 2019-2021 to 2.4% of the gross domestic product. The decision is significantly higher than 2.0% target by the European Union and could lead to clash within the union members.

It is not the number which scares the market instead of the resistance shown by the Italian populist government against Union which could lead to bigger resistance.

U.S stock market expected to open lower as DJIA futures down,n 83 points. There is not much news coming from domestic. The market is focusing on Europe news and recent rate-hike done by The Fed. Today is the last day of September, looking from the fundamental side, we might need to prepare for a bearish month in October.

Asian & European Stock market

Asian stock market paint the last day of September green. Nikkei up 323.30 points (+1.36%) to 24,120.04, Shang Hai Composite up 29.58 points (+1.06%) to 2,821.35, and Australia ASX 200 up 26.40 points (+0.43%) to 6,207.60. European stock market edge lower. DAX Germany down 1.36%, UK FTSE down 0.54%, Euro STOXX600 down 0.69%.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA manage to close the day positive in the previous day, however, it seems the index will close the Friday trading session lower. Our projection sees the index continue its descend toward the bottom of the channel without any change in the situation.

Pepsico Inc (PEP)

The weakness of PEP share prices has reached the daily SMA 200 for the second retest. If the bull could prevent the share prices from further downside and print a bullish candlestick pattern then we could expect PEP to continue its uptrend. However, a sharp breakout below the averages could trigger selling toward daily SMA 100 or $107.00.

Tesla Inc (TSLA)

TSLA become the target of selling after series of controversial news and departure of peoples from the company. Currently, the share prices located at the sweet spot to sell, the daily SMA 200 where traders could take a high-odds short position.

A short position from the averages might start a new bearish trend, however, traders must watch the level around $290.00 and $275.00. It is the support area where the bear has trouble in the past.