Stocks on the Nasdaq 100 have lost the opening momentum and have turned lower after US Treasury Secretary Steven Mnuchin opined that it would be hard to get a deal before the US elections.
Mnuchin made these remarks at the Milken Institute Global Conference. Despite his optimism about making progress on specific issues, he is not as confident about getting a deal done before the US elections. A spokesman to US House Speaker Pelosi confirmed a discussion between Mnuchin and Pelosi and said that a further phone discussion is fixed for Thursday.
The mixed earnings reports of banks also soured sentiment. Bank of America saw a drop in its revenues despite increased earnings per share, while Wells Fargo saw a 56% hit on its profits. Goldman Sachs posted results that beat market estimates, and Netflix surged on the day as a Goldman Sachs analyst upped his price projections for the stock by more than 10%.
The Nasdaq 100 was also hit by news of the pause of at least two coronavirus vaccine trials in the US. Johnson & Johnson paused its Phase 3 ENSEMBLE trial after a participant developed an unexplained illness. Eli Lilly halted enrolment into its antibody treatment trial over safety concerns.
Technical Outlook for Nasdaq 100
Today’s 1% drop follows yesterday’s pinbar candle that signalled a pause in further upside movement following Monday’s break of the neckline of the inverse head and shoulders pattern.
The candle is now testing the support at 12003.6. A breakdown of this price level allows 11794.1 to come into view, with 11567.6 and 11271.2 lining up as potential downside targets.
A bounce on 12003.6 may allow bulls to come back into the fray, but this is dependent on positive news on the stimulus talks.