Solid News

DJIA Market Update

9/12/2022 2:20 PM

The Dow Jones index is being corrected within a local downtrend, trading around ​​32195.0.

Due to the lack of fundamental news, the focus of investors is still on the message from the manufacturer of construction and mining equipment Caterpillar Inc. on the settlement of a dispute with the US Internal Revenue Service relating to the payment of fees totaling 2.4B dollars by the Swedish division of the company. The proceedings lasted more than a year, and investors will finally be able not to fear that the issuer's debt burden will increase since all penalties have now been lifted.

Nevertheless, the key factor influencing the quotes of the Dow Jones index will soon be the dynamics in the bond market. Already, auctions will be held for the placement of three-month, six-month, three-year, and ten-year treasury notes and bills. Given the current high bond prices, there is no doubt that rates in all categories will significantly exceed previous performance. Thus, the last placement rate on ten-year notes was 2.755%, and now they are traded above 3.34%. The growth of yield is an unconditional negative signal for the stock market, rapidly losing its investment attractiveness.

The growth leaders in the index are Inc. (+3.63%), Caterpillar Inc. (+3.46%), and 3M Co. (+3.21%).

Among the decline leaders are UnitedHealth Group Inc. (–0.29%), The Travelers Companies Inc. (–0.22%), and McDonald's Corp. (–0.22%).

The trading instrument shows corrective dynamics without a specific direction. Technical indicators continue to hold a sell signal, which periodically weakens: the Alligator indicator's EMA oscillation range remains quite wide, and the AO oscillator histogram forms new rising bars in the sell zone.

Support levels: 31813.0, 30990.0. | Resistance levels: 32557.0, 33300.0.

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