{"id":170492,"date":"2020-05-13T12:07:12","date_gmt":"2020-05-13T16:07:12","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=170492"},"modified":"2020-05-13T12:07:12","modified_gmt":"2020-05-13T16:07:12","slug":"dow-extends-losing-run-after-powells-dismal-outlook","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/05\/dow-extends-losing-run-after-powells-dismal-outlook\/","title":{"rendered":"Dow extends losing run after Powell’s dismal outlook"},"content":{"rendered":"
May 13, 2020<\/div>
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By Han Tan, Market Analyst, <\/strong>ForexTime<\/strong><\/a><\/p>\n

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The Dow Jones index is now shedding over 200 points and\u00a0extending its declines this week, after Fed chair Jerome Powell on Wednesday warned of lasting damage to the US economy if policymakers do not put up enough of a fight against the coronavirus outbreak. Should\u00a0the Dow close\u00a0in the red again today, this would mark the index\u2019s first three-day losing run since early March.<\/p>\n

From a technical perspective, it remains to be seen whether the Dow\u2019s 65-day simple moving average has had the final say in ensuring that the index does not go higher. After all, it has prevented the index from closing above it in recent sessions.<\/p>\n

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To be sure, the Federal Reserve has already lowered US interest rates to near zero, pledged to buy \u201cunlimited\u201d amounts of bonds, and is even lending directly to businesses and state governments.<\/p>\n

Still, global investors will have to remain vigilant in assessing whether the colossal amounts of policy support are enough to fill the economic abyss left in Covid-19\u2019s wake. With Powell also warning of the \u201csignificant downside risks\u201d to the world\u2019s largest economy, the dark and uncertain outlook may be enough to put a lid on the current optimism over the US economy\u2019s reopening. Future bouts of policy support also may not be accompanied with the same levels of market optimism during the initial rescue measures rolled out by the Fed, along with the separate US$3 trillion in aid from the fiscal side.<\/p>\n

As the US earnings season draws to a close, US equity bulls may soon realize that they\u2019ve been riding merely on hot air. Powell\u2019s downbeat rhetoric could leave optimists with little to go by, considering the harsh economic realities laid bare by the hard data, which one after another have posted record lows.<\/p>\n

Whatever the catalyst may be, don\u2019t be surprised if the next selloff in US stocks is as swift and dramatic as the capitulation witnessed in the final stretch of Q1.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n<\/div>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Han Tan, Market Analyst, ForexTime The Dow Jones index is now shedding over 200 points and\u00a0extending its declines this week, after Fed chair Jerome Powell on Wednesday warned of lasting damage to the US economy if policymakers do not put up enough of a fight against the coronavirus outbreak. Should\u00a0the Dow close\u00a0in the red […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-170492","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/170492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=170492"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/170492\/revisions"}],"predecessor-version":[{"id":170495,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/170492\/revisions\/170495"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=170492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=170492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=170492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}