Wednesday, October 3, 2018

DOWJONES - 03 October 2018

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Fundamental Highlights

U.S. equities were mixed during the second trading day of this quarter. Dow outperformed its equity benchmark peers to notch another record close this year even as the broader market slumped amid worries on China-U.S. trade relations and a simmering crisis in Italy. Fed Chair Jerome Powell delivered his remarks at the National Association for Business Economics's 60th annual meeting in Boston last night. Powell said the central bank has been able to keep inflation in check by managing expectations. He reiterated that there is no sign of a big shift in long-term inflation expectation; inflation has remained around the Fed's 2 percent target even though unemployment is near a 50-year low. However, the majority of the speech addressed concerns over the Phillips curve, which represent the relationship between the labor market and inflation. Powell also noted that he understands how unusual the Fed’s forecast profile is, which suggested little precedent for the sort of sustained growth, employment, and also low inflation rate. Touching on inflation expectations, Fed monitors various iterations of these and added that the Fed won’t start selling assets since interest rates will always be the main policy tool.

Technical Analysis

Dow Jones closed Tuesday's session with an increase of 123 points. During today's session, the index may continue its bullish move towards the 26844 figure where it may break it and move further in the direction of the 26877 area creating new highs for the Dow. During Wednesday's session the Dow seems to be a strong buy.

Support: 26613 26537
Resistance: 26844 26877

Chart (H1)
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