A marked rise in the initial jobless claims numbers and the continued impasse over the stimulus package are responsible for the lower open on the Dow Jones Industrial Average.
The Dow Jones is down 0.36% after both Senate Minority Leader Chuck Schumer and House Speaker Nancy Pelosi rejected the latest $916billion stimulus plan put forward by US Treasury Secretary Steve Mnuchin. The plan, which reduced the funding for jobless benefits, had received some bipartisan support but did not meet the expectations of top Democrats in Congress.
Adding to the bearish sentiment was the delisting of some blacklisted Chinese companies from the Dow Jones indices. Several American Depository Receipts (ADRs), A-Shares and H-shares listed in mainland China and Hong Kong, were axed in compliance with President Trump’s November executive order. 18 other companies are also slated for delisting at the turn of the year.
Initial Jobless Claims rose to 853K, up from last week’s number that shows 716K rise. The markets expected a rise by 723K.
Technical Outlook for Dow Jones
Today’s drop puts the triangle’s lower border at risk. If this border gives way and a conclusive breakdown ensues, the pattern becomes a topping pattern. This could prompt a selloff towards 29255 initially, with 28978 also following suit.
On the flip side, recovery and a break above the triangle allow the Dow Jones to initially target 31158 (78.6% Fibo extension). Further targets to the upside may be found at 32505, in the medium term.
Dow Jones Daily Chart
