News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • - Reduction in the balance sheet is not a substitute for higher interest rates
  • Heads Up:🇺🇸 Continuing Jobless Claims (24/JUL) due at 12:30 GMT (15min) Expected: 3260K Previous: 3269K https://www.dailyfx.com/economic-calendar#2021-08-05
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.42% 🇳🇿NZD: 0.36% 🇨🇦CAD: 0.31% 🇪🇺EUR: 0.11% 🇨🇭CHF: 0.10% 🇯🇵JPY: -0.04% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/tT1sFAfOWg
  • Heads Up:🇺🇸 Jobless Claims 4-week Average (JUL/31) due at 12:30 GMT (15min) Previous: 394.5K https://www.dailyfx.com/economic-calendar#2021-08-05
  • Heads Up:🇺🇸 Initial Jobless Claims (31/JUL) due at 12:30 GMT (15min) Expected: 384K Previous: 400K https://www.dailyfx.com/economic-calendar#2021-08-05
  • Heads Up:🇺🇸 Balance of Trade (JUN) due at 12:30 GMT (15min) Expected: $-73.9B Previous: $-71.2B https://www.dailyfx.com/economic-calendar#2021-08-05
  • Heads Up:🇨🇿 CNB Interest Rate Decision due at 12:30 GMT (15min) Expected: 0.75% Previous: 0.5% https://www.dailyfx.com/economic-calendar#2021-08-05
  • Heads Up:🇨🇦 Balance of Trade (JUN) due at 12:30 GMT (15min) Expected: C$-0.8B Previous: C$-1.39B https://www.dailyfx.com/economic-calendar#2021-08-05
  • - The Bank Rate is the BoE's main policy tool for altering monetary conditions - Impact of reducing stock of BoE assets is uncertain
  • BoE's Bailey - After furlough period expires, we do not see an increase in unemployment - Job openings and labour market tightness are becoming more evident
Dow Jones Forecast: Covid Vaccine May Breathe New Life Into DJIA

Dow Jones Forecast: Covid Vaccine May Breathe New Life Into DJIA

Peter Hanks, Strategist

Dow Jones Price Outlook:

Advertisement

Dow Jones Forecast: Covid Vaccine May Breathe New Life Into DJIA

The Dow Jones charged higher in Monday trade after Pfizer announced a potential coronavirus vaccine. The news saw risk appetite rage alongside some of the more distressed sectors of the economy. Cruise lines, airlines, energy and entertainment were big winners alongside financials and healthcare.

Monday’s Biggest Winners Were Those Hurt Most During Pandemic

covid stocks

Conversely, stocks that had long benefited from the transition to a work-from-home lifestyle were left out to dry. Zoom, Peloton and Docusign were just some of the losers and a rather tepid response from the big tech stocks saw the ratio of the Nasdaq 100 to Dow Jones fall significantly. All in all, the development of a possible vaccine has seen a rapid increase in the pace of the rotation from work-from-home stocks to those that were most vulnerable during the pandemic.

Monday’s Biggest Losers Were Those That Benefited During Pandemic

Dow Jones Forecast: Covid Vaccine May Breathe New Life Into DJIA

That being said, the pandemic still rages with daily cases soaring to new heights. Further still, the purported vaccine has yet to pass FDA approval and is 90% effective. Coupled with possible public reluctance to taking such a vaccine, it can be argued the pandemic is far from over so the rotation witnessed today could be a little bit overdone in my opinion. With that in mind, there may be sectoral plays to be made in the weeks ahead.

Dow Jones Price Chart: Daily Time Frame (February 2020 – November 2020)

dow jones price chart

Either way, the surge higher on Monday saw the Dow Jones tag a new all-time high - albeit briefly. Following the retracement during the session, the Industrial Average closed just narrowly above the September high which should offer some degree of support in the days ahead. If broken, subsequent support might be found at the October high near 28,970.

In terms of resistance, immediate levels are rather sparse apart from the prior all-time high around 29,570. Therefore, the newfound catalyst of a possible covid vaccine alongside stimulus hopes, lowered odds of corporate tax increases and a potential infrastructure program, the medium-term outlook for US equities - the Dow Jones in particular - is quite encouraging at this stage. In the meantime, follower @PeterHanksFXon Twitter for updates and analysis.

--Written by Peter Hanks, Strategist for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES