Is there enough momentum for the Dow Jones to reach the mythic 30,000 mark?
US
2020 got off to a rockier start than expected, the US-Iran conflict disrupting the initial goodwill that greeted the New Year. Well, it’s taken a couple of weeks, but the stars seem to have realigned.
The signing of the ‘phase one’ trade deal between the US and China and, a day later, the passing of the USMCA agreement in the Senate provided solutions – some perhaps more temporary than others – to a couple of big issues. Claims from EU Trade Commissioner Paul Hogan that efforts to ease tensions between the bloc and Washington were off to a ‘good start’ only added to the positive atmosphere, as did a solid set of fourth quarter figures from China.
This left the Dow Jones near 29400, with talk turning to its ceiling. In other words, can the index climb all the way to 30,000? In terms of things standing in its way, a lot of its recent concerns have been cleared from the table. An escalation in impeachment proceedings against Donald Trump – or a rogue geopolitical decision from the President – could cause the index to unravel. Ditto a bad earnings season. But for now, at least, momentum appears to be on the side of the Dow Jones.
Interestingly the US is facing a pretty quiet economic calendar. Martin Luther King Day on Monday sort of sets the tone for the week – it’s not until Friday that the region gets some top tier data in the form of its flash manufacturing and services PMIs.
As for the week’s updates, Netflix (NASDAQ:NFLX) on Tuesday is the undoubted highlight, its fourth quarter release coming between the launches of Disney+ and Apple (NASDAQ:AAPL) TV+ last year, and the impending introduction of HBO Max and NBC’s Peacock. Subscription numbers are likely to be the focus.
Halliburton (NYSE:HAL), United Airlines and IBM (NYSE:IBM) join Netflix (NASDAQ:NFLX) on Tuesday, with Johnson & Johnson on Wednesday and Intel (NASDAQ:INTC) and Comcast (NASDAQ:CMCSA) on Thursday.
UK
Each piece of UK data released at the moment is going to be scrutinised by the pound for its rate cut-prompting powers, especially following last week’s awful GDP and retail sales readings.
Tuesday has the latest jobs report, with wage growth expected to slip from 3.2% to 3.2% including bonuses. The CBI industrial order expectations on Wednesday is then set to increase oh-so-slightly month-on-month, while Friday’s flash services and manufacturing PMIs are both forecast to improve.
In terms of corporate updates, there’s Dixon Carphone on Tuesday, alongside Computacenter (LON:CCC) and Daily Mail General Trust on Thursday.
Eurozone
Over in the Eurozone there’s the German ZEW economic sentiment reading on Tuesday, and the flash services and manufacturing PMIs on Friday. There’s also Thursday’s ECB meeting, one expected to see the launch of Christine Lagarde’s strategic review.
"Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved."