- The Dow Jones is set to close north of 44,000 for the first time ever as bulls continue to run.
- Equity markets have tilted fully into the buy side after Trump’s decisive election win.
- US CPI inflation print due in the mid-0week as markets eye more Fed rate cuts.
The Dow Jones Industrial Average (DJIA) lurched another 300-plus points higher on Monday, with equities on the climb in an extension of the bull run kicked off after last week’s Trump win at the election polls. Markets are deceptively thin on Monday with most of the US shuttered during the Veteran’s Day holiday. Still, bidders continue to push the Dow Jones into record territory regardless.
Last week saw presidential candidate Donald Trump sweep to a surprise win in the latest US presidential election and another rate trim from the Federal Reserve (Fed). Investors see everything coming up aces, with US jobs data continuing to beat expectations and pulverize previous fears of an economic hard landing scenario.
Later this week brings a fresh update to US Consumer Price Index (CPI) inflation figures. October’s headline CPI is expected to accelerate to 2.6% YoY from the previous period’s 2.4%, with core CPI for the same period forecast to hold steady at 3.3% YoY. Thursday will follow up with US Producer Price Index (PPI) business-level inflation, which is also expected to tick higher to 2.9% YoY in October from 2.8%.
Fed Chair Jerome Powell will also make an appearance on Thursday, where the head of the Fed will participate in a panel discussion hosted by the Fed Bank of Dallas. Audience questions are expected to run the gamut of trying to nail down a hint about the Fed’s plans for another rate cut in December. Investors should also expect a familiar slew of questions about Chair Powell’s intent to ‘step down’ as head of the Fed if incoming president-elect Donald Trump asks for it, something the President’s office has no power or authority to request.
Dow Jones news
Don’t tell the Dow Jones Monday is a holiday; two-thirds of the index’s listed securities are pushing into the green to kick off the new trading week. Salesforce (CRM) surged over 5.5% to $340 per share as the AI bid continues to trickle into companies in the utility tech space, despite a clear path forward on when or even how large-scale data models will generate excess revenue. Honeywell International also rose 2% to $224 per share, tapping into a fresh-two year high.
Dow Jones price forecast
The Dow Jones is firmly back on its bullish ways, tearing into new record high bids and poised for a close north of 44,000 on Monday. The major equity index is now up nearly 20% bottom-to-top in 2024, and has risen an eye-watering 47% since the last time price action touched the 200-day Exponential Moving Average (EMA) near 30,000 in October of 2022.
Traders interested in trying to mount a short position have their work cut out for them; the Dow is on pace to close in record territory for a fifth straight month, leaving a complete lack of technical entry points on the table. Traders carrying long interest might look to pare some bets when the Dow Jones taps 45,000 for the first time, as large round figures tend to create some congestion.
Dow Jones daily chart
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
