Dow Jones, Nasdaq 100, CAC 40, DAX 30 Forecast:
Dow Jones, Nasdaq 100,CAC 40, DAX 30 Fundamental Forecasts
Friday saw the major equity markets undergo a vicious sell-off as investors fled risk assets amid a deteriorating US-China trade relationship. While many expected Fed Chairman Jerome Powell to strike a dovish tone during his Jackson Hole speech, which he arguably did, President Trump was quick to express his distaste for the pace of expected cuts. [1]
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Shortly thereafter, President Trump announced that the 25% tariff tranche facing China will be increased to 30% on October 1 and the 10% tax scheduled for September 1 will jump to 15% in response to China's retaliatory tariffs totaling $75 billion on US goods that they issued early Friday morning. Together, the fast-paced hikes confirm the economic conflict is more than a mere skirmish. Since President Trump's tariff hike was released to markets after the close, the resultant price action will unfold on Monday. With such a steep escalation, expect risk aversion to grip markets. Meanwhile, uncertainty could ignite further during the G-7 Summit over the weekend.
Dow Jones Forecast
Outlook: Bearish
That said, the DJIA[3] will have to negotiate the fallout from the US-China trade war flare-up. Given the lack of scheduled speeches by Fed members, the Industrial Average – and the S&P 500[5] – will have to cope with the underlying issues facing the market without the tailwind of persistent dovish commentary. Further, futures suggest investors are nearly certain a 25-basis point cut is coming at the September FOMC[6] meeting. Regardless, the Dow Jones may look to threaten key
