- The Dow Jones Industrial Average (DJIA) lost less than 0.1%, to end near 26,143
- S&P 500 ended flat at 2,888.
- Nasdaq Composite lost 0.2% to finish around 7,947.
U.S. stocks ended a touch lower or even on Thursday ahead of the start of earnings season on Friday. The Dow Jones Industrial Average (DJIA), lost a marginal 14 points, or less than 0.1%, to end near 26,143 while the S&P 500 ended flat at 2,888 and the Nasdaq Composite lost 0.2% to finish around 7,947. Earnings season will be a major driver as investors weigh up the risks of a pending U.S. recession and the slow down in European and China, as warned by a number of leading agencies such as the IMF and IEA this week. On Friday, eyes will be on JPMorgan Chase & Co. and Wells Fargo & Co.representing the banking sector that starts off the earnings season.
We had some Fed chat crossing the wires with the Federal Reserve vice chairman Clarida re-emphasising the Fed’s patience. Clarida was noting that core inflation is well contained and that inflation expectations are towards the low end of the range. We also had FOMC voting member Bullard who says that there is no need for further rate rises, arguing that the yield curve will steepen as Q2 and Q3 data is published.
U.S. data impresses:
Producer prices were up to their strongest increase in five months, rising 0.6% m/m in March – (stronger petrol prices were benefiting). However as analysts at ANZ bank note, “Core measures were softer suggested a lack of underlying pipeline inflationary pressures. On an unadjusted basis, the index increased by 2.2% y/y, ahead of market expectations of 1.9%. – March CPI data for both German and France was aligned with market expectations. German data came in at 0.4% m/m while the French data was at 0.8% m/m, providing markets with some assurance.”
DJIA levels
From a technical perspective, the DJIA is struggling to hold the bid and is heavy, testing bull’s commitments while slicing through Feb’s resistance and onto March’s at 26109 (that level was priced with a low of 26062 on Thursday – lower than the April 1 low of 26071). On a break here, the first key bearish target at the 25700s (50-D SMA) ahead of the 200-DMA which is located in the 25200s guarding a break all the way down to 24800 gap area ahead of the 24500s and then 50% of the upside run made at the end of Dec at 24200.
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