Dow Jones, Nasdaq 100, DAX 30 Forecasts For The Week Ahead

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DOW JONES, NASDAQ 100, DAX 30 OUTLOOKS:

  • The Dow Jones saw earnings season kick off last week with earnings from JP Morgan, Wells Fargo and Citi
  • This week, the Nasdaq 100 will look to FAANG member Netflix for insight
  • Capped by technical resistance, the DAX 30 may require a fundamental spark to continue higher

DOW JONES FUNDAMENTAL FORECAST

OUTLOOK: MIXED

The Dow Jones enjoyed a boost last week from the US-China phase one trade deal which was officially signed on Wednesday. While the deal delayed another round of tariffs, some analysts are skeptical China will move to meet the new requirements which could see the US impose punitive measures – effectively escalating the conflict once more.

For the time being, however, the deal resulted in a sense of optimism and has paved the way for a second phase which President Trump has said may only be signed after the 2020 election. While talks of progress in the interim are to be expected, the Dow Jones may have to look to other themes for direction in the meantime.

DOW JONES PRICE CHART: DAILY TIME FRAME (MARCH 2018 – JANUARY 2020) (CHART 1)

Daily Dow Jones Price Chart

NASDAQ 100 FUNDAMENTAL FORECAST

OUTLOOK: NEUTRAL

One such theme will be the continuation of earnings season. Average earnings from Citi, Bank of America and Wells Fargo were offset by JP Morgan which posted the best quarter on record for a bank. Together, the earnings worked to boost the financials sector. Now, the tech-heavy Nasdaq 100 will shift focus to Netflix earnings on Tuesday. Previously a member of the high-flying FAANG group, Netflix has been exchanged for Microsoft (FAAMG) after a few disappointing quarters. Should the streaming service disappoint again on Tuesday, tech sentiment could take a hit and drag the entire Nasdaq and Dow Jones with it.

Dow Jones, Nasdaq 100, DAX 30 Forecasts for the Week Ahead

Source: SlickChartsWeightings as of January 17

Since Apple and Microsoft account for more than 20% of the index alone, sentiment regarding the industry is critically important for keeping recent bullishness intact. With that in mind, Netflix has the odds stacked against it with new entrants into the space from Disney and Peacock, while Apple and Amazon have continued to expand offerings on their own platforms. Therefore, equity traders should keep a close eye on earnings from Netflix, followed by reports from Intel and Texas Instruments.

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