DOW JONES, HANG SENG, ASX 200 INDEX OUTLOOK:
- Dow Jones, S&P 500 and Nasdaq 100 indexes closed +0.13%, -0.05% and -0.23% respectively
- US ISM Manufacturing PMI rose to 61.2 in Might, in comparison with a baseline forecast of 60.9
- Asia-Pacific markets are positioned for a blended open. The HSI is testing a key chart resistance
Small-cap Rally, US Knowledge, OPEC+, Grasp Seng Index, Asia-Pacific Outlook:
The small-cap-centric Russell 2000 index rose 1.14% in a single day, outperforming large-cap indices. This urged that buyers had been most likely rotating out from blue chips and into small- to mid-cap shares amid inflation issues. Rising retail speculative exercise could sign an overheated market situation.
Inventory costs of AMC leisure and GameStop rallied 22.66% and 12.17% respectively, largely pushed by a renewed wave of speculative exercise by Reddit day merchants. The so referred to as “brief squeeze” technique in play right here goals to drive name choice writers and brief sellers to cowl their losses by buying again the shares from the open market, sending costs even larger.
The Dow Jones index closed modestly larger on Tuesday, buoyed by a stronger-than-expected ISM manufacturing PMI knowledge that underscores financial power. The studying got here in at 61.2, exceeding a baseline forecast of 60.9 and likewise marking the twelfth consecutive month of growth. Demand, consumption and inputs registered sturdy development in comparison with April, with provide scarcity and labor constrains pointing to additional rise in value ranges.
Robust financial readings buoyed reflation optimism, sending the 10-year Treasury yields larger to 1.615% – a one week excessive. Supplies and power sectors outperformed, whereas the know-how sector suffered a gentle pullback. WTI crude oil prices surged 1.5% to a recent two-and-half yr excessive of $ 67.90 because the OPEC+ painted a shiny outlook for power demand and stayed on track to regularly roll again manufacturing cuts. Increased oil costs could help power, oil & gasoline in addition to offshore marine sectors.
US ISM Manufacturing PMI – 3 Years
Asia-Pacific markets are positioned for a blended begin on Wednesday. Futures in Japan, Hong Kong, Taiwan, Singapore are within the pink, whereas these in mainland China, Australia, South Korea, Malaysia, India and Thailand are within the inexperienced.
Hong Kong’s Grasp Seng Index climbed over 1% yesterday, lifted the know-how sector. Knowledge exhibits southbound internet influx through the inventory connection surged to HKD 5,295 million on June 1st as threat urge for food of mainland buyers revitalized. This might sign additional value power because the inventory connections account for practically 1 / 4 of the whole buying and selling quantity on the HK inventory change.
Grasp Seng Index vs. Every day Southbound Internet Move – 12 Months
Supply: Bloomberg, DailyFX
Wanting again to Tuesday’s shut, 5 out of 9 Dow Jones sectors ended larger, with 43.3% of the index’s constituents closing within the inexperienced. Supplies (+2.91%), power (+2.76%) and financials (+1.99%) outperformed, whereas healthcare (-1.56%) and shopper discretionary (-0.75%) trailed behind.
Dow Jones Sector Efficiency 01-06-2021
Supply: Bloomberg, DailyFX
Dow Jones Index Technical Evaluation
The Dow Jones index is difficult the 200% Fibonacci extension degree (34,920) for a second time. A profitable try could open the door for additional upside potential, whereas a failed one could lead to a bearish “Double Prime” sample. Costs stay inside an “Ascending Channel” fashioned since early November, the ceiling and the ground of which function key help and resistance ranges respectively. Bearish MACD divergence means that bullish momentum could also be fading nonetheless.
Dow Jones Index – Every day Chart
Grasp Seng Index Technical Evaluation:
The Grasp Seng Index (HSI) fashioned a “Double Backside” chart sample on the day by day chart and could also be positioned for additional value good points. The index breached above the trend-determine 100-day SMA line with upward momentum. A right away resistance degree could be discovered at 29,344 – the 50% Fibonacci retracement in addition to the neckline of the “Double Backside”. Breaching above this degree could open the door for additional upside potential with an eye fixed on 29,778 – the 38.2% Fibonacci retracement.
Grasp Seng Index – Every day Chart
ASX 200 Index Technical Evaluation:
The ASX 200 index reached an all-time excessive on Friday after breaching above a key resistance degree of seven,126 – the 261.8% Fibonacci extension. Costs have since opened the door for additional upside potential with an eye fixed on 7,200. The MACD indicator fashioned a bullish crossover and trended larger, suggesting that upward momentum is constructing.
ASX 200 Index – Every day Chart
— Written by Margaret Yang, Strategist for DailyFX.com
To contact Margaret, use the Feedback part under or @margaretyjy on Twitter