Dow Jones, Nasdaq 100, DAX 30 Price Outlooks:
Nasdaq 100 Forecast
The Nasdaq 100 reached new heights yet again last week as stocks like Tesla, Apple and Amazon continued to build on recent gains. As a key member of the S&P 500, Nasdaq 100 and Dow Jones, Apple is afforded considerable influence in the performance of the three major US indices and it has been soaring as of late – bolstering the otherwise lackadaisical US equity market.
Nasdaq 100 Price Chart: Daily Time Frame (January 2020 – August 2020)
Chart created with TradingView
To that end, news that the Cupertino, California-based company reached a market capitalization of $2 trillion last week was a scintillating piece of evidence for the growth that has occurred in just a few technology names. To put Apple’s explosive growth into perspective, the company added more than $100 billion to its market cap in last Friday’s session alone. The entire market capitalization of Boeing stands just shy of $95 billion.
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Weekly Stock Market Outlook
While the valuation milestone does little in terms of impacting stock price directly, it may help feed bullish sentiment and spark demand for some of the high-flying FANGMAN members, potentially leading to an indirect boost to their share prices. Either way, sentiment around the Nasdaq 100 stocks has been a vital force behind the covid recovery rally and recent price action has revealed little indication they will suddenly reverse lower.
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With that in mind, it seems the US indices are beholden to the same themes they have been for months now: Big technology stocks garnering the most attention and driving gains, while indices like the Russell 2000 flounder for growth and other sectors outside of tech struggle to recover from their initial covid losses.
Dow Jones Forecast
Considering the seasonal effects on the broader market environment, the Dow Jones may be closely aligned with the price performance of Apple in the week ahead. The stock has climbed to the top of the index’s weighting list – commanding more than 11.5% of the Industrial Average. With tech at the driver’s seat, price swings in Apple could spark subsequent moves in the Dow as other sectors and Dow components languish about in the summer doldrums.
Dow Jones Price Chart: Daily Time Frame (January 2020 – August 2020)
DAX 30 Forecast
The DAX 30 will await German GDP data due later this week. After better than expected data was released from the United Kingdom just two weeks ago, expectations may have shifted for Germany and the data might spark a price reaction as a result. Regardless of direction, the scheduled event has the possibility to inject volatility into an otherwise docile market.
DAX 30 Price Chart: 4 – Hour Time Frame (May 2020 – August 2020)
In summation, global equity markets have exhibited few signs of excitement in the last few weeks as average true ranges slip and volume fades. Absent a busy economic calendar, stocks may continue to hold their current ranges, succumbing to their broader technical patterns until a catalyst arrives. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.
–Written by Peter Hanks, Strategist for DailyFX.com