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Inflation Fears Grip the Market: DJIA Eyes Data Amid Recent Upsurge!


The Dow Jones reaches a 45-day high before investors cash-in profits ahead of this afternoon’s inflation reading.
Producer and Consumer inflation has risen for 3 consecutive months, but investors hope for a “cool-down” in April.
73% of the Dow Jones’ stocks trade higher during today’s pre-trading hours. All 3 US Indices edge higher but the day’s performance will strongly depend on the PPI!
Home Depot, the fifth most impactful company for the DJIA, will release their quarterly earnings report before the US Session Opens.

USA30 – All Eyes On Inflation As Earnings Data Takes A Back Seat!

The Dow Jones was the only US Index which held onto its value and also saw upward price movement. However, as the NASDAQ and SNP500 saw strong declines, investor sentiment fell, and investors also cashed in profits for the DJIA. As a result, the price ended 0.19% lower than the opening price. Of the top 15 most influential stocks, 12 are trading higher while 3 are trading lower this morning.

The best performing stock in the pre-trading hours is Home Depot, which will release their earnings data within the next 2 hours. Analysts say the company’s Earnings Per Share are to rise from $2.82 to $3.60 and for Revenue to rise to $36.65 Billion. The company has beaten expectations over the past 12 months, but investors have been slightly cautious about the lower sales figures. The stock this year is trading 1.00% lower but has a strong dividend yield at 2.65%. If the company’s earnings again beat expectations the stock can potentially rise, which will significantly support the Dow Jones.

Nonetheless, the most influential event will be this afternoon’s Producer Price Index and tomorrow’s Consumer Price Index. Investors will simply be hoping for lower figures and ideal for inflation to fall as much as possible. Should inflation decrease, it’s probable that the USA30 and other indices will climb. Yet, should the PPI and CPI hold steady or surpass expectations, the repercussions could be disappointing for shareholders. This primarily stems from its impact on interest rates. If inflation increases, the Federal Reserve is likely to keep interest rates unchanged for 2024 unless circumstances change later in the year. Currently, 11% of market participants believe the Fed will not cut interest rates in 2024 according to the latest surveys.

USA30 – Technical Analysis and Signals

Price action is not yet the best indicator due to the upcoming events, which can significantly change the momentum and direction. Nonetheless, the price is currently trading above VWAP and Cumulative Delta indicates more buy orders than sell orders. The price also trades above the 75-BAR EMA and above the 50.00 level on the RSI. According to momentum indicators and price action, buy signals are likely to materialize above $39,588.00. While bearish signals may develop if the price drops below $39,413.34.

Michalis Efthymiou

Market Analyst

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