Dow Jones at New Record Highs On China Stimulus

Dow Jones Industrial Average hit fresh all-time highs on the first trading session of the year.  Positive sentiment boosted by news that the central bank of China would cut the reserve requirement ratio for the banks by 50 bps. President Donald Trump announced that the Phase One trade deal with China would be signed on January 15th.

In our trading calendar, it was  manufacturing PMI’s day. In the United States the Manufacturing PMI came in at 52.4, below the forecasts of 52.5 in December. The Initial Jobless Claims dropped by 2,000 at 222,000 below the estimates of 225,000 in December. The U.S. Challenger Job Cuts fell to 32.843K in December from the previous 44.569K reading.

In Europe the PMI’s came stronger than expected, the Germany Manufacturing PMI came in at 43.7 topping expectations of 43.4 in December. France Markit Manufacturing PMI came in at 50.4 beating expectations of 50.3.

The Manufacturing PMI from China came in at 51.5 below expectations of 51.7 in December, disappointing investors.

The S&P 500 adds 11.19 points, to 3,241.91 while the Nasdaq Composite is 59.60 points higher at 9,034.86.

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Dow Jones Bullish Outlook

Dow Jones is 0.67% higher at 28,730 as the index hits fresh all-time highs boosted by gains in Boeing and Intel as the appetite for risky assets skyrockets. The bullish momentum which started in 2019 is still intact as the Dow Jones continues making higher highs and higher lows.

On the upside in our daily graph there is only one resistance at 28,743.80 the daily top before the index visit unchartered territories. Next level for bulls to watch on the upside is the 28,900 round figure.

On the flip side, first support for Dow Jones index stands at 28,627 the daily low.  More bids might emerge at 28,369 the low from December 31st session. The 50-day moving average at 27,839 will offer the next strong support for the index.

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