DJIA dropped 29 points on trade deal pessimism

It was a U.S. Columbus Day holiday on Wall Street and action was limited. However, benchmarks ended lower on prospects of the so-called 'Phase-1' deal  |  14/10/2019 22:08
  • The S&P 500 lost a marginal 0.1% to end near 2,966.
  • DJIA, dropped 29 points, or 0.1%, to finish around 26,787.
  • The Nasdaq ended lower by 0.1% to end near 8,049.

It was a U.S. Columbus Day holiday on Wall Street and action was limited. However, benchmarks ended lower on prospects of the so-called 'Phase-1' deal between the US and china breaking down before even getting started. Beijing would not sign off on an agreement until further details were worked out. 

The S&P 500 lost a marginal 0.1% to end near 2,966 while the Dow Jones Industrial Average, DJIA, dropped 29 points, or 0.1%, to finish around 26,787, based on preliminary numbers. Nasdaq Composite ended lower by 0.1% to end near 8,049.

Trade deal is not a done deal

As for the US and Chinese trade deal, the market understands that the deal agreed last week Trump and the Chinese is not completely a done deal: "Opinion remains mixed as to whether the Chinese offer this week to buy additional US agricultural goods and the US’ decision to suspend additional tariffs represent the beginning of actual, real progress, or is merely a plaster as US elections get closer. Overnight China said it wanted more talks before signing the deal, but an optimistic tweet from China’s Global Times Editor-in-Chief soothed market nerves," analysts at ANZ Bank explained. 

DJIA levels

The index bearish pin-bars on the daily chart and price leaning on trendline resistance turned support casts a negative outlook and it seems as though the  27500s was a touch too ambitious for the open this week, leaving the July highs over the horizon, for the time being. Bears will otherwise now seek a close back below the trendline with a focus back on the 200-DMA down in the 26400s.

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