Dow Jones Outlook Talking Points:
- A strong non-farm payrolls report is needed to rebound from last month’s miss and to stave off a hit to consumer confidence
- The Dow Jones[1] finds itself outside a nearby band of resistance that has held since early November
- Learn to utilize IG Client Sentiment Data[2] effectively with one of our many Live Sentiment Data Walkthroughs.[3]
Dow Jones Outlook: Technical Resistance Tested, Awaits NFP Data
The Dow Jones breached a key technical barrier on Thursday, driving above 26,290 – a level which has held since early November. To continue its recent trend higher, the Dow Jones will look for strong non-farm payroll data on Friday morning. February’s report was wildly beneath expectations[4] and a second month of soft employment data could begin to adversely impact consumer confidence and in turn, consumer spending.
US Employment Overview (Chart 1)
In the Conference Board’s March consumer confidence report, curators of the index noted poor employment as a drag on overall confidence. “Confidence has been somewhat volatile over the past few months, as consumers have had to weather volatility in the financial markets, a partial government shutdown and a very weak February jobs report. Despite these dynamics, consumers remain confident that the economy will continue expanding in the near term. However, the overall trend in confidence has been softening since last summer, pointing to a moderation in economic growth” the report stated.
An underwhelming report tomorrow would further weigh on confidence and support claims from the IMF which recently slashed global GDP expectations.[5] However, many market participants believe February’s data to be a one-off and expect
