The Dow Jones index erased earlier gains after the Department of Labor released weak weekly jobless claims data. As of this writing, the Dow was up by just 100 points, lower than the day’s high of about 500 points. Another report by Challenger showed that the number of job cuts in March increased to the highest level since the last financial crisis.
Most of these gains have been driven by energy companies. Exxon Mobil, the giant oil and gas company, rose by more than 6% in the premarket. Chevron, its smaller peer rose by more than 7%. This increase happened as the price of crude oil rose by more than 10% on hopes that Saudi Arabia and Russia will ink a deal soon.
Boeing, the index worst performer this year, also rose by more than 3%. The biggest news was that the company had offered voluntary buyouts to its 161k employees. In a statement, the company’s new CEO said that the company is going through challenges, which will be bigger after the crisis ends.
Boeing was already in trouble before the crisis started. The company was facing a lot of delays in returning its beleaguered 737-max back in air after the crash in Ethiopia last year. Now, the current crisis means that more airlines will be forced to go out of business or shrink in a bid to save money. This will hurt the company’s sales.
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Dow Jones Forecast
The Dow Jones index is trading at $20,930, which is slightly below the day’s high of $21,300. On the hourly chart, the index is trading below the 50-day and 100-day exponential moving averages. The price is also slightly above the day’s low of $20, 742. The index is also slightly above the 38.2% Fibonacci Retracement level. I expect the index to remain bearish below the important $20,742 support level.
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