- The Dow Jones backed down on Tuesday while the feeling of investors is hindered.
- It is expected that the next decision of the Fed rates maintain the rates without changes while the uncertainty weighs on those responsible for monetary policy.
- Operators expect significant updates on trade agreements in which the US is allegedly working and will be announced at some point.
The Dow Jones industrial average (DJIA) remained downward in the wider stock market on Tuesday, with the actions suffering a slight blow before the next decision of the Federal Reserve (Fed) on Wednesday. Investors also expect any significant update of the Trump administration on a series of trade agreements that are supposedly in process. However, the details remain scarce to the point of being non -existent.
It is widely expected that the Fed maintains the rates without changes on Wednesday, but the Fed conversation points will acquire greater importance for market participants who expect signs of a change towards a cycle of feat cuts by those responsible for the FED in the coming months. Rate markets are discounting between 100 and 125 basic points in feat cuts over the next 12 months.
Fed rates cuts and trade agreements remain elusive
The Trump administration has also been sharp in the Fed must begin to cut rates. However, this position has more to do with the desire to relieve US debt financing pressures than to support the Fed mandate to promote maximum employment and control price volatility. Until now, Fed officials seem to be structurally opposite to cut interest rates before the appropriate time.
According to the Trump administration, a package of possible trade agreements is on its way. Specific details, or even with which countries these supposed trade agreements are being negotiated, remain a secret. According to key personnel within the Trump administration, these trade agreements are being negotiated with 17-18 countries. None of them seem to be China, which recently expressed a possible willingness to approach the negotiating table, completely denialing Donald Trump’s claims that his administration has been negotiating with Chinese officials not identified for weeks.
Dow Jones price forecast
The impulse in the general recovery of the industrial average Dow Jones has found a bump. The price action has stagnated in the 50 -day exponential (EMA) mobile average in 41,144, with the bullish impulse drying just south of the 200 -day EMA key in 41,620.
The 41,000 area is the new price roof that bidders must overcome. Technical oscillators remain in overcompra territory, which implies that some purchase pressure may need to find a release before another rising impulse can be generated.
Dow Jones daily graphics
Dow Jones Faqs
The Dow Jones Industrial Avenge, one of the oldest stock market indexes in the world, consists of the 30 most negotiated values ​​in the United States. The index is weighted by the price instead of capitalization. It is calculated by adding the prices of the values ​​that compose it and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, also founder of the Wall Street Journal. In recent years it has been criticized for not being sufficiently representative, since it only follows 30 companies, unlike broader rates such as S&P 500.
There are many factors that promote the Dow Jones Industrial Average (DJIA) index. The main one is the added performance of the companies that compose it, revealed in the quarterly reports of business benefits. The American and world macroeconomic data also contribute, since they influence investor confidence. The level of interest rates, set by the Federal Reserve (FED), also influences the DJia, since it affects the cost of credit, on which many companies depend largely. Therefore, inflation can be a determining factor, as well as other parameters that influence the decisions of the Federal Reserve.
Dow’s theory is a method to identify the main trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Avenge (DJIA) and the Dow Jones Transportation Average (DJTA) and just follow the trends in which both move in the same direction. The volume is a confirmation criterion. The theory uses elements of maximum and minimum analysis. Dow’s theory raises three phases of the trend: accumulation, when intelligent money begins to buy or sell; Public participation, when the general public joins the trend; and distribution, when intelligent money abandons the trend.
There are several ways to operate with the DJ. One of them is to use ETF that allow investors to negotiate the DJ as a single value, instead of having to buy shares of the 30 companies that compose it. An outstanding example is the SPDR Dow Jones Industrial Avenge ETF (day). Future contracts on the DJ allow the specular operators about the future value of the index and the options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Investment funds allow investors to buy a part of a diversified portfolio of DJ values, which provides exposure to global index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
