The Dow Jones Index had its worst week since 2023 with a 4.5% drop final week. In the earlier 5 buying and selling days, the highest US Index fell by greater than 1300 factors. The two principal developments affecting US equities in the mean time are the upcoming rate of interest hike and the failure of Silicon Valley Bank. The S&P 500 and Nasdaq 100 additionally ended final week by setting new month-to-month lows.
On Monday, the Dow fell additional as buyers have been nonetheless ready for extra particulars on the way forward for SVB, though the market has stabilised after the most recent announcement from the US banking regulator. In Tuesday’s buying and selling nonetheless, the Dow closed 336 factors or 1% increased, whereas the S&P 500 and Nasdaq 100 gained 1.6% and a couple of.1% respectively, as February inflation eased and fears of a broader monetary disaster eased.
The Labour Department’s CPI report confirmed that month-to-month inflation rose 0.4% in February from January, consistent with expectations, leading to annual inflation slowing to six%, the bottom since September 2021. Investors speculated that the Fed could quickly be capable to pause its tightening cycle as considerations mount over the well being of the broader monetary system following the SVB failure and SB closure. On the company entrance, regional financial institution shares rallied once more after a turbulent few periods.
Technical Review
USA30, D1 – The index hit a contemporary yearly low in its final buying and selling session. The USA30 briefly nonetheless didn’t surpass the November 2022 low positioned at 31,709. This is a zone of robust demand that might result in a bounce, and the bears briefly solely registered a contemporary low at 31496.8 earlier than closing at 32,145.8.
A shift in curiosity has been underway, because the index broke the 32,467 assist final week and now costs are under the 200-day EMA. If the worth fails to defend the 31,709 stage, then the Index may fall to 30,063.5. This would additionally put a potential new 2-year low at the moment at 28,583.
To enhance investor sentiment, the index wants to interrupt above the 200-day transferring common within the coming time to grab the 33,589 stage. The RSI has bounced off the oversold space, however the MACD remains to be validating the latest value motion.
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Ady Phangestu
Market Analyst – HF Educational Office – Indonesia
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