Market outlook: Dow reaches new highs, but are the markets losing steam?

(Partial Video Transcript)

Markets losing steam?

Angeline Ong: Hello. Welcome to “Beat the street”. The show designed to give our clients of IG the edge ahead of the cash open in any moment. We’re now going to look forward to it. Coming up, just getting you across what’s happening in the markets losing steam. Traders starting to waver on Fed rate bets after a stellar week for US indices, or can the melt up continue? Meme stocks: GameStop, AMC still the focus after a rollercoaster week. And Tesla: Why it sees China’s data as key to its AI pivots.

Now a very good afternoon. Welcome to this edition of “Beat the street”. Not long before Wall Street starts trading. Now let’s just have a look at what I mean by that “melt up”. It’s defying gravity here. Looking at the Dow Jones Industrials here, this is the daily chart. And of course, it’s been quite a week. We’ve been watching this. It did cross that 40,000 mark before coming back, also taking a tilt at it back in April. And it briefly, as I mentioned earlier, passed that milestone yesterday in the previous session. But where to now? Well, Jeremy Naylor joins us now with a look at how the markets are likely to open and where they’ve come from this week. Jerry?

Discussing market performance

Jeremy Naylor: It has been an absolutely stunning move. And in fact, if you expand it right the way back to October last year, it is startling as to what this bull market is looking like. And we talk about difficult finding straight lines in markets, but well, I wouldn’t say it’s straight, but it’s as good as it gets in terms of direction travel. As you said yesterday, the Dow yesterday, 40,000, a seminal moment in the history of the Dow Jones Industrial Average. This is only the industrials list, utilities as well. There are other averages around to watch out for, but this is the benchmark and that’s what a lot of people quote when looking at this.

So psychologically, 40,000 was a raising point to pass. But it wasn’t just the Dow that saw gains yesterday. It was the S&P 500. It was the NASDAQ. The Tech 100. And also Russell 2000 as well. Let’s take a look at the Dow, because I think, as you just said, this really sort of typifies things. And what I’ve done here is I’ve drawn this sort of black grayish box on here, which shows you where we were back on the 27th of October. The low point intraday, low point that we saw there was a 32,322.

So we’ve come all this way in this in this time. We did actually try and make a tilt, as you say, at this top here, back on the 1st of April, trying to get over 40,000, failed to do so and then came back. And now there has been this resurgent Dow, S&P, NASDAQ. Wall Street has seen all sorts of performance on the upside.

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