Moderate drops in opening are expected, these are the factors to consider.
1- We have been two days where the same thing happens. The Chinese stock market is having a hard time facing interventionist measures from the Chinese Communist Party government, trying regulations and interventions that are not sounding good to the market.
This causes the Asian sessions to have a bad atmosphere and force future Americans in that time slot to corrections. But when the opening arrives, as it happened yesterday, all that effect is diluted. Although this serious collapse of the Chinese stock market is always a negative factor to consider.
2- We have a huge wave of results today. At the moment we highlight those of Tesla that have been good and it is that for the first time in a long time the benefits do not come from selling environmental rights but finally they come from the sale of cars which is normal.
After the closure Apple, Microsoft, Google, among many others, almost nothing.
3- In addition, many operators do not want trouble until they see what happens tomorrow at the FED meeting.
4- The macro data continues to turn out bad and today we had one well below forecasts. Durable goods orders, that is, with an average life greater than 3 years, such as a car or a television. The Citi index of economic surprises is very low and all this continues to feed the thinking of many operators that growth has peaked and more with the problems that the virus is giving again.
5- The nasdaq is still very strong and as long as it remains above 15,000 it can go much higher. Goldman in its technical analysis believes that it could reach the 15,500 zone at least.
The SP 500 continues one more day breaking stone against resistance 4400, be careful if it succeeded, the next station would be 4500.
6- The one that is bad again today is the Russell of small companies that has a much more important fall, it is not a good day for cyclicals and value.
7- General Electric has given results today and they have been good so it rises almost 4%. The whole season of results has been really good.
8- Chinese stocks listed in the US are falling sharply after the problems mentioned above in the China stock market.
9- The bonds to their thing that is to go up and keep reminding the markets that growth is twisting.
10- Bearish divergences continue to accumulate in the large indices.
Jose Luis Carpathians