- The Dow Jones lost 150 points on Friday, going back to 41,200.
- Investors prepare for geopolitical tensions while the US and China are aimed at initial commercial conversations.
- Even a public networks of President Trump considering 80% tariffs could strengthen the feeling of the market.
The industrial average Dow Jones (DJIA) followed the largest market downward on Friday, falling to 41,150 while investors prepare for a tense weekend. United States (USA) and China are aimed at opening commercial conversations in Switzerland this weekend, but those responsible for policies of both administrations have warned that conversations will be strictly preliminary. Chinese delegates have specifically warned that a definitive agreement could be months away.
The president of the USA Donald Trump used early social networks on Friday, publicly reflecting on a possible reversal of tariffs on Chinese products that are currently located in an amazing 145%. Donald Trump raised the idea of reducing 80%Chinese tariffs. An 80% tariff on Chinese products is indistinguishable from 145%, since both levels are so high that they functionally represent an embargo on cheap trade, on which the entire US economy depends completely.
The moderate Federal Reserve is still apprehensive to fees settings
The Federal Reserve (FED) adopted a firm waiting tone this week, after maintaining stable interest rates in May. A group of people responsible for the FED made public appearances on Friday, but they all made a significant effort to avoid talking directly about monetary policy. The Fed seems willing to continue ignoring the uncertainty of an unequal commercial policy that makes it impossible to precisely foresee the economic results, leaving the Fed dependent on the data firmly on the sidelines.
According to the CME Fedwatch tool, rates operators are still valuing better chances that the Fed is forced to make another cut of a quarterfinal in July, but the bets have been returning to another pause in the rates. In the current cut, rates markets are valuing a 40% probability that the Fed does not cut in July either, an increase with respect to 20% to 30% probabilities that were handled earlier this week.
Dow Jones price forecast
The Dow Jones is prepared for a prolonged setback after failing in a bullish race in the 200 -day exponential mobile (EMA) average about 41,600 this week. The price action is going back from the key mobile average, but the short -term technical support is being valued in the EMA of 50 days about 41,150.
Despite the dark technical clouds that accumulate on it, the impulse still rests firmly in the hands of the bidders. The Dow Jones has recovered more than 12.5% since the fall of April below 37,000, and the offers have continued to increase as the feeling of the market is recovered.
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.
