Dow Jones, Nasdaq 100, DAX 30 Outlooks:
- The week ahead marks the advent of Q4, 2019 earnings season for many companies, an arrival that will surely have an impact on some of the Dow’s largest components
- On Wednesday, the Fed is set to announce its repo operations schedule for the coming weeks
- Meanwhile the DAX 30, alongside US indices, will await details of the US-China Phase One trade deal agreement set to be signed on Thursday
Dow Jones Fundamental Forecast
The Dow Jones was able to avoid a serious retracement last week but may have its toughest tests ahead. Earnings season is set to kick off on Tuesday with the country’s largest banks when JP Morgan, Citigroup, Wells Fargo and Bank of America release their quarterly results, followed by a string of other high-profile earnings to round out the week. In total, more than 15% of the Dow Jones will divulge their fourth quarter performances to the public. On a single-stock basis, this will be the most important theme to watch.
Dow Jones Price Chart: 4 - Hour Time Frame (October 2019 – January 2020) (Chart 1)
As for the index as a whole, Wednesday’s repo schedule announcement and Thursday’s reported US-China Phase One trade deal signing are poised to be the headline issues. An aggressive balance sheet expansion since September has allowed for the Industrial Average to reach new heights – combined with the euphoria brought about by the initial announcement of the trade deal. If either of these themes are threatened, it could work to erode the Industrial Average.
However, comments from Fed Vice Chairman Richard Clarida suggest the Fed’s repo operations will continue into April, an encouraging sign