Friday, September 17, 2010

Dow Jones Industrial Average Outlook, 14/09/2010

After surging 529 points or 5.1% in Sept, the Dow ended 17.6 points lower to 10527 points yesterday. It hovered between +44 points and -44 points as investors reacted to conflicting data in US and Germany. Sentiment in early trade was boosted by a strong August retail sales, which grew 0.4%, beating market consensus of 0.3% and July’s reading of 0.3%. Nevertheless, the optimism was kept in check because of fresh concerns about Europe with the German’s investor confidence falling sharply in September to -4.3 (consensus: 10; Aug: +14).

For Wall Street, we reiterate our view that the Dow should consolidate around the 200-d SMA and DTL, with a tough overhead resistance at 10720 pts (3M high) ahead of the major FOMC meeting on 21 September and the September quarterly reporting season in mid Oct. Major economic announcements for the rest of this week are Aug IPI (September 15), Aug PPI and weekly jobless claims (September 16), Aug CPI and September consumer sentiment (Sep 17).

Source: MarketWatch

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