The Dow Jones Industrial Average index (DJIA) continued to retreat from its historic highs on the back of risk aversion. It closed Wednesday’s trading at 112.9 points or 0.40% lower at 27,821.1.
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Home Depot was the biggest loser as it drop 2.20% to 220.90. In second was 3M with a 1.70% loss at 166.33, while Pfizer had a 1.62% loss at 37.05.
The largest forex news that also affected equity markets was a report that came from Reuters yesterday. According to it, people close to the negotiations say that the US and China are facing headwinds as they attempt to strike off a phase one deal. China is asking for higher rollbacks and it seems that the US is not willing to budge. In a separate statement, US President Donald Trump has said that he does not mind abandoning a trade deal if the Chinese continue to push their way. It has been said that a deal is unlikely to happen this 2019.
This, in turn, sent stocks lower because investors had been hoping for positive developments in negotiations.
For today, the stock index could find some support from economic data coming from the US. At 1:30 pm GMT, the Philly Fed Manufacturing Index is eyed to show that business conditions in the sector continued to improve with the forecast higher at 7.0 for November from 5.6 in October. Alongside it, the unemployment claims report is seen to come in at 215,000.
Then at 3:00 pm GMT, existing home sales is expected to print at 5.49 million.
On the 4-hour chart, we can see that the Dow Jones is currently testing support at the rising trend line from connecting the lows of October 3 and October 31. If market sentiment turns and risk appetite picks up, we could see buyers push the index back above the 28,000 psychological handle. On the other hand, if support does not hold, the index can drop to 27,192.00 where it made highs in September 19 and October 31.Download our latest quarterly market outlookfor our longer-term trade ideas.
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