Oct 18, 2022
VOT Research Desk
Market Analytics and Considerations
ASIA PACIFIC INDICES BRIEFING, DOW JONES, ASX 200, BANK OF AMERICA, Tech ANALTICS
On Monday, the Dow Jones rose as firms in the consumer discretionary sector gained.
Confidence improved after Bank of America’s profits downplayed the effects of the US recession.
The ASX 200 in Australia might be in for a good Tuesday hour of trading
Monday’s trading session came to a close with Wall Street market sentiment
Improving. Futures on the Dow Jones Industrial Average, the S&P 500, and the Nasdaq100 all experienced gains of 1.76 percent, 2.55 percent, and 3.41 percent, respectively. The S&P 500’s breakdown of consumer discretionary (4.23 percent), real estate (3.89 percent), and communication services (3.34 percent)
A positive earnings report from Bank of America, in which recession warnings were largely downplayed and the American consumer was emphasized, helped stocks. As the reporting season gets underway, that could suggest that other businesses will continue to express optimism. The bank reports that credit card spending increased by 13% in Q3 compared to the previous year.
The US economy is centered on consumption. According to Bank of America, consumers appear to be unperturbed despite inflation that is at its highest level in 40 years and is also largely outpacing wage gains. With unemployment remaining at an all-time low, this could point to an economy that is continuing to withstand the Federal Reserve’s rapid monetary tightening.
Dow Technical View – Dow Jones futures are back at key resistance around 30513, which is under pressure. A break above the 20-day Simple Moving Average (SMA) precedes this. The 50-day moving average (SMA) can be seen if a breakout above resistance is confirmed, reviving the downside focus. The falling trend line from the beginning of this year is likely to be the more significant test even if it does not.
After the strong gains from the Wall Street trading session, Asia-Pacific markets may anticipate a fairly upbeat session. According to reports, China will delay the release of GDP data for the third quarter, leaving the economic docket empty.
Therefore, traders may concentrate on the overall sentiment. The ASX 200 in Australia may benefit from the stability of the US economy. The economy of Australia is influenced by the global business cycle. Positive spillover effects from a robust US economy could benefit the nation.
Technical Analysis of the ASX 200 The ASX 200 is still trading above the 20-day SMA and the 50-day line. The latter could stand as resistance, bringing back the focus to the negative. However, a possible falling trend line from April may prove to be the more significant technical obstacle in the future. Key support appears to be the 78.6% Fibonacci retracement at 6562 in the event of a turn lower.
