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Nasdaq Hits Record High as Biden Takes Office, Hang Seng Eyes 30,000

NASDAQ 100, HANG SENG, ASX 200 INDEX OUTLOOK:

  • A “risk-on” rally extended on Wall Street, backed by strong earnings and Biden’s inauguration
  • The Hang Seng Index looks set to extend gains beyond the 30,000 mark, led by the tech sector
  • BoJ, ECB interest rate decisions and US weekly jobless claims are in focus today

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Nasdaq 100, US Earnings, Hang Seng, ASX 200, Asia-Pacific at Open:

US equities registered strong gains overnight as President Joe Biden’s inauguration brightened the prospects for fiscal stimulus and measures to be put in place to counter the pandemic. Prior to this, Treasury Secretary nominee Janet Yellen showed her support for Biden’s US$ 1.9 trillion fiscal spending plan and opposed tax hikes, which may lend more support to stock markets’ rally.

Among S&P 500 companies, gains were led by communication services (+3.6%), consumer discretionary (+2.3%) and information technology (+2.0%) sectors. The Nasdaq 100 index advanced 1.97% to an all-time high of 13,457, led by Alphabet (+5.36%), Amazon (+4.57%), Microsoft (+3.65%). Netflix soared 16% after reporting strong subscriber growth and share buyback plans. US earnings continued to deliver positive surprises, with 12 out of 13 S&P 500 companies beating market forecasts last night (table at the end). Looking ahead, Gilead Sciences, Intel Corp and IBM are among the key companies to reveal results today. Read more on my earnings outlook report.

Nasdaq 100 Index Top 10 Stocks Performance 20-01-2021

Nasdaq Hits Record High as Biden Takes Office, Hang Seng Eyes 30,000

Source: Bloomberg, DailyFX

A strong US trading session may set an upbeat tone for the Asia-Pacific open, with futurespointing to a higher start across Japan, Hong Kong, mainland China, Australia, South Korea, Singapore and India. The Hang Seng TECH Index surged 5.44% on Wednesday, dwarfing the broader HIS’s 1.08% gain and outperforming major indices across the region. The tech-led rally was propelled by strong southbound inflows from mainland China investors, with many mutual funds and institutions among them.

Australia’s ASX 200 Index opened 0.77% higher, led by information technology (+2.55%), consumer staples (+1.40%), and financials (+1.15%) sectors. The index looks set to challenge a key resistance level of 6,810, buoyed by broad “risk-on” sentiment and hopes that Biden’s fiscal stimulus may boost demand for raw materials.

On the macro front, both BoJ and ECB are expected to keep their policy rates unchanged today. Worsening pandemic situations in Japan may not warrant further easing against the backdrop of economic resilience and strengthen in Japan’s equity market. Tonight’s weekly US jobless claims is expected to fall slightly to 910k from 970k in the previous week. A higher number may point to further weakness in the labor market and raise the need for relief aid. Find out more from DailyFX calendar.

Weekly US Jobless Claims – Week ending 15th Jan 2021

Nasdaq Hits Record High as Biden Takes Office, Hang Seng Eyes 30,000

Source: Bloomberg, DailyFX

Nasdaq 100 Index Technical Analysis

The Nasdaq 100 Indexcontinued its upward trajectory within the “Ascending Channel” formed since early November. The seemingly “one-way” rally is well-supported by the 20-Day Simple Moving Average (SMA) line and the upward trajectory remains in intact. The formation of bullish MACD crossover indicates strong upward momentum. Immediate support and resistance levels can be found at 12,960 (100% Fibonacci extension) and 13,357 (127.2% Fibonacci extension) respectively.

Nasdaq 100Daily Chart

Nasdaq Hits Record High as Biden Takes Office, Hang Seng Eyes 30,000

Hang Seng Index Technical Analysis:

The Hang Seng Index is riding a strong trend and is about to challenge a psychological resistance level at 30,000. Breaching it may open the door for further upside potential with an eye on 30,933 – the 161.8% Fibonacci extension. The MACD indicator is trending up alongside prices, reflecting strong bullish momentum.

Hang Seng IndexDaily Chart

Nasdaq Hits Record High as Biden Takes Office, Hang Seng Eyes 30,000

ASX 200 Index Technical Analysis:

The ASX 200 index is range-bound between 6,575 to 6,770 since late November, as highlighted in the chart below. Price has likely breached the upper bound of 6,770 and is now attempting to break the 200% Fibonacci extension level of 6,810. A widening Bollinger Band width suggests that momentum is tilted more to the upside.

ASX 200 Index – Daily Chart

Nasdaq Hits Record High as Biden Takes Office, Hang Seng Eyes 30,000

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S&P 500 Earnings Calendar 20-21st January 2021

Name

Date

Period

Actual

Estimate

Surprise

ASML Holding NV

20/1/2021

Y 20

8.49

7.732

9.80

UnitedHealth Group Inc

20/1/2021

Q4 20

2.52

2.408

4.70

Discover Financial Services

20/1/2021

Q4 20

2.59

2.40

7.90

Alcoa Corp

20/1/2021

Q4 20

0.26

0.106

145.30

United Airlines Holdings Inc

20/1/2021

Q4 20

(7.00)

(6.652)

(5.20)

Citizens Financial Group Inc

20/1/2021

Q4 20

1.04

0.918

13.30

Bank of New York Mellon Corp/T

20/1/2021

Q4 20

0.96

0.898

6.90

US Bancorp

20/1/2021

Q4 20

0.95

0.949

0.10

Fastenal Co

20/1/2021

Q4 20

0.34

0.329

3.30

Procter & Gamble Co/The

20/1/2021

Q2 21

1.64

1.507

8.80

Morgan Stanley

20/1/2021

Q4 20

1.92

1.293

48.50

Silvergate Capital Corp

20/1/2021

Q4 20

0.47

0.383

23.10

Kinder Morgan Inc

20/1/2021

Q4 20

0.27

0.235

14.90

Truist Financial Corp

21/1/2021

Q4 20

0.951

TAL Education Group

21/1/2021

Q3 21

0.066

KeyCorp

21/1/2021

Q4 20

0.43

Northern Trust Corp

21/1/2021

Q4 20

1.488

Travelers Cos Inc/The

21/1/2021

Q4 20

3.198

M&T Bank Corp

21/1/2021

Q4 20

3.012

FuelCell Energy Inc

21/1/2021

Q4 20

(0.023)

Gilead Sciences Inc

21/1/2021

Q4 20

1.897

Fifth Third Bancorp

21/1/2021

Q4 20

0.688

Baker Hughes Co

21/1/2021

Q4 20

0.172

Union Pacific Corp

21/1/2021

Q4 20

2.244

CSX Corp

21/1/2021

Q4 20

1.005

Intel Corp

21/1/2021

Q4 20

1.111

Intuitive Surgical Inc

21/1/2021

Q4 20

3.154

International Business Machine

21/1/2021

Q4 20

1.791

PPG Industries Inc

21/1/2021

Q4 20

1.569

People’s United Financial Inc

21/1/2021

Q4 20

0.318

Seagate Technology PLC

21/1/2021

Q2 21

1.134

SVB Financial Group

21/1/2021

Q4 20

3.873

Source: Bloomberg

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

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