- The Dow Jones is looking to the high side, but it is reluctant before the last Decision on Fed interest rates.
- It is generally expected that the FOMC maintain interest rates without changes, and investors will focus on any change in policy communication.
- Another maintenance of rates will probably generate more anger from the Trump administration.
The Dow Jones industrial average (DJIA) is moving in the graphics in a short -term consolidation, trapped near the level of 42,350 while investors prepare and expect the last decision of the Federal Reserve (Fed). It is generally expected that the Fed maintains rates without changes until at least September, leaving investors review the Summary of Economic Projections (SEP) and seek any change in the writing of policy statements.
The SEP of the Federal Open Market Committee (FOMC), or “Point Graph”will be updated on Wednesday. Those responsible for the Fed policy tend to have a high degree of precision when forecasting when and how much the Fed fees will adjust, so any change in the points graph will quickly capture the attention of the market.
The president of the USA, Donald Trump, will probably be paying close attention to the Fed rates decision too. Trump has been intensifying his caustic rhetoric against Fed, and specifically against the president of the FED, Jerome Powell, in recent months. President Trump is looking for ways to reduce the financial burden of the US debt service, and convince the Fed to arbitrarily reduce interest rates could achieve that. However, the Fed remains firmly strengthened in a position of “waiting and seeing” while those responsible for the policy are prepared for the negative economic impacts of the intermittent tariff policies of the Trump administration.
The latest decision of FOMC interest rates and SEP update are scheduled for 11:00 GMT. President Powell’s monitoring press conference and the subsequent questions and answers will begin shortly after, at 11:30 GMT.
Read more news about actions before the Fed: Goldman Sachs, JPMorgan go up on Wednesday before the decision on Fed’s interest rates
Dow Jones price forecast
The Dow Jones is moving in a tight range, caught in a short -term congestion. The main stock market index is caught in a consolidation zone just north of the 200 -day exponential (EMA) mobile average about 41,800, and the price action is moving towards the average range with stagnant technical oscillators stagnated in no one.
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.
