Dow Jones continues the consolidation phase that started the previous week, as the deadlock in negotiations in Washington and the cancellation of the meeting between China and USA weigh on investors sentiment.
The retail sales on Friday came in at 1.2% showing that the American economy is gaining momentum but lags analyst’s expectations for a fast recovery, the consensus for the retail sales was at 1.9%. The employment also improves as the United States Initial Jobless Claims reported at 963K, the first reading below one million since March 21.
Today N.Y. Empire State Manufacturing Index dropped to 3.7 in August well below the expectations of 15 and the previous reading of 17.2 in July.
Investors wait for the Fed’s last policy meeting minutes on Wednesday, for fresh clues on the state of U.S. economic recovery.
In corporate news, IBM announced a new data center processor that will able to handle triple the workload of its previous processors. Samsung will manufacture the new IBM chip called the Power10.
Alibaba is under pressure after President Trump said that he would put more pressure on Chinese companies after the ban of TikTok and WeChat. Retailers will be on focus this week as Walmart, Kohrs and Target reporting earnings later on the week.
Dow Jones Daily Technical Analysis
Dow Jones futures in premarket are 0.40% higher at 27,903, as the positive momentum continues to drive the index. The technical outlook point to further gains, but investors should be cautious as the index is entering the overbought area, which might make some investors book some of the recent gains.
Resistance would be met at 27,977 the high from Friday’s trading session. Next obstacle for Dow Jones stands at 28,159 the top from August 11.
On the other hand, support for today is at 27,759. A break below might challenge 27,452 the low from August 10. A threat to the bullish momentum is a break below the 50-day moving average at 26,497.
Dow Jones Daily Chart