US equities registered strong gains overnight as President Joe Biden’s inauguration
Wall Street saw a tech-led rally that sent both the Nasdaq 100 and S&P 500 indices to their record highs on strong earnings and Biden’s agenda. The Hang Seng Index aims to break 30,000 to a fresh 20-month high.
NASDAQ 100, HANG SENG, ASX 200 INDEX OUTLOOK:
- A “risk-on” rally extended on Wall Street, backed by strong earnings and Biden’s inauguration
- The Hang Seng Index looks set to extend gains beyond 30,000 mark, led by the tech sector
- BoJ, ECB interest rate decisions and US weekly jobless claims are in focus today
Nasdaq 100, US Earnings, Hang Seng, ASX 200, Asia-Pacific at Open:
US equities registered strong gains overnight as President Joe Biden’s inauguration brightened the prospects for fiscal stimulus and measures to be put in place to counter the pandemic. Prior to this, Treasury Secretary nominee Janet Yellen has showed her support to Biden’s US$ 1.9 trillion fiscal spending plan and opposed tax hikes, which may lend more support to stock markets’ rally.
Among S&P 500 companies, gains were led by communication services (+3.6%), consumer discretionary (+2.3%) and information technology (+2.0%) sectors. The Nasdaq 100 index advanced 1.97% to an all-time high of 13,457, led by Alphabet (+5.36%), Amazon (+4.57%), Microsoft (+3.65%). Netflix soared 16% after reporting strong subscriber growth and share buyback plans. US earnings continued to deliver positive surprises, with 12 out of 13 S&P 500 companies beating market forecasts last night (table at the end). Looking ahead, Gilead Sciences, Intel Corp and IBM are among the key companies to reveal results today. Read more on my earnings outlook report.
Nasdaq 100 Index Top 10 Stocks Performance 20-01-2021
Source: Bloomberg, DailyFX
A strong US trading session may set a upbeat tone for Asia-Pacific open, with futures pointing to a higher start across Japan, Hong Kong, mainland China, Australia, South Korea, Singapore and India. The Hang Seng TECH Index surged 5.44% on Wednesday, dwarfing Hang Seng Index’s 1.08% gain and outperforming major indices across the region. The tech-led rally was propelled by strong southbound inflows from mainland China investors, many of which are mutual funds and institutions.
Australia’s ASX 200 Index opened 0.77% higher, led by information technology (+2.55%), consumer staples (+1.40%), and financials (+1.15%) sectors. The index looks set to challenge a key resistance level of 6,810, buoyed by broad “risk-on” sentiment and hopes that Biden’s fiscal stimulus may boost demand for raw materials.
On the macro front, both BoJ and ECB are expected to keep their policy rates unchanged today. Worsening pandemic situations in Japan may not warrant further easing against the backdrop of economic resilience and strengthen in Japan’s equity market. Tonight’s weekly US jobless claims is expected to fall slightly to 910k from 970k in the previous week. A higher number may point to further weakness in the labor market and raise the need for relief aid. Find out more from DailyFX calendar.
Weekly US Jobless Claims – Week ending 15th Jan 2021
Source: Bloomberg, DailyFX
Nasdaq 100 Index Technical Analysis
The Nasdaq 100 Index continued its upward trajectory within the “Ascending Channel” formed since early November. The seemingly “one-way” rally is well-supported by the 20-Day Simple Moving Average (SMA) line and the upward trajectory remains in intact. The formation of bullish MACD crossover indicates strong upward momentum. Immediate support and resistance levels can be found at 12,960 (100% Fibonacci extension) and 13,357 (127.2% Fibonacci extension) respectively.
Nasdaq 100 – Daily Chart
Hang Seng Index Technical Analysis:
The Hang Seng index is riding a strong trend and is about to challenge a psychological resistance level at 30,000. Breaching it may open the door for further upside potential with an eye on 30,933 – the 161.8% Fibonacci extension. The MACD indicator is trending up alongside prices, reflecting strong bullish momentum.
Hang Seng Index – Daily Chart
ASX 200 Index Technical Analysis:
The ASX 200 index is range-bound between 6,575 to 6,770 since late November, as highlighted in the chart below. Price has likely breached the upper bound of 6,770 and is now attempting to break the 200% Fibonacci extension level of 6,810. A widening Bollinger Band width suggests that momentum is tilted more to the upside.
ASX 200 Index – Daily Chart
S&P 500 Earnings Calendar 20-21st January 2021
|ASML Holding NV||20/1/2021||Y 20||8.49||7.732||9.80|
|UnitedHealth Group Inc||20/1/2021||Q4 20||2.52||2.408||4.70|
|Discover Financial Services||20/1/2021||Q4 20||2.59||2.40||7.90|
|Alcoa Corp||20/1/2021||Q4 20||0.26||0.106||145.30|
|United Airlines Holdings Inc||20/1/2021||Q4 20||(7.00)||(6.652)||(5.20)|
|Citizens Financial Group Inc||20/1/2021||Q4 20||1.04||0.918||13.30|
|Bank of New York Mellon Corp/T||20/1/2021||Q4 20||0.96||0.898||6.90|
|US Bancorp||20/1/2021||Q4 20||0.95||0.949||0.10|
|Fastenal Co||20/1/2021||Q4 20||0.34||0.329||3.30|
|Procter & Gamble Co/The||20/1/2021||Q2 21||1.64||1.507||8.80|
|Morgan Stanley||20/1/2021||Q4 20||1.92||1.293||48.50|
|Silvergate Capital Corp||20/1/2021||Q4 20||0.47||0.383||23.10|
|Kinder Morgan Inc||20/1/2021||Q4 20||0.27||0.235||14.90|
|Truist Financial Corp||21/1/2021||Q4 20||0.951|
|TAL Education Group||21/1/2021||Q3 21||0.066|
|Northern Trust Corp||21/1/2021||Q4 20||1.488|
|Travelers Cos Inc/The||21/1/2021||Q4 20||3.198|
|M&T Bank Corp||21/1/2021||Q4 20||3.012|
|FuelCell Energy Inc||21/1/2021||Q4 20||(0.023)|
|Gilead Sciences Inc||21/1/2021||Q4 20||1.897|
|Fifth Third Bancorp||21/1/2021||Q4 20||0.688|
|Baker Hughes Co||21/1/2021||Q4 20||0.172|
|Union Pacific Corp||21/1/2021||Q4 20||2.244|
|CSX Corp||21/1/2021||Q4 20||1.005|
|Intel Corp||21/1/2021||Q4 20||1.111|
|Intuitive Surgical Inc||21/1/2021||Q4 20||3.154|
|International Business Machine||21/1/2021||Q4 20||1.791|
|PPG Industries Inc||21/1/2021||Q4 20||1.569|
|People’s United Financial Inc||21/1/2021||Q4 20||0.318|
|Seagate Technology PLC||21/1/2021||Q2 21||1.134|
|SVB Financial Group||21/1/2021||Q4 20||3.873|
This commentary is kindly contributed by Margaret Yang, Strategist, DailyFX