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

Ipad, Online, Tablet, Internet, Screen, Digital

DOW JONES, NASDAQ 100, DAX 30, FTSE 100 FORECASTS: BEARISH

  • The Dow Jones and Nasdaq 100 will await a FOMC rate decision where minor changes are expected
  • The DAX 30 will follow market sentiment as the FTSE 100 awaits Brexit news

DOW JONES FORECAST

Outlook: Bearish

US indices entered the weekend on the backfoot as investors await the upcoming Federal Open Market Committee rate decision in the week ahead. While no change to the interest rate range is expected, minor tweaks to the bond-buying, balance sheet expansion and maturity of held securities may become the focus of the market’s attention instead. The Federal Reserve’s monetary policy operations have become increasingly vast in the wake of coronavirus which has added another layer of complexity to the monetary policy adjustments.

S&P price chart and fed balance sheet

The increased operations have also resulted in a rapidly expanding balance sheet, one that remains a key tailwind behind US equities. As other fundamental forces have come and gone, the Fed’s accommodation has remained and is likely a large part of the stellar performance the Dow Jones, Nasdaq 100 and S&P 500 have enjoyed this year. Thus, any perceived pullback in the Fed’s willingness to buoy the economy could seriously undermine the three indices.

DOW JONES PRICE CHART: 4 – HOUR TIME FRAME (SEPTEMBER 2020 – DECEMBER 2020)

dow jones price chart

NASDAQ 100 FORECAST

Outlook: Bearish

The Nasdaq 100 suffered a modest decline last week despite a white-hot IPO market that has seen remarkable gains in recently-launched technology stocks. AirBnB was the most recent addition to the market and quickly doubled from its opening price. Valued beneath $20 billion in March, the company briefly enjoyed a valuation greater than $100 billion – an alarming increase amidst a global pandemic.

NASDAQ 100 PRICE CHART: 4 – HOUR TIME FRAME (AUGUST 2020 – DECEMBER 2020)

1 2
View single page >> |

Disclosure: See the full disclosure for DailyFX here.

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.