A week before the U.S. presidential election, investors will monitor many corporate results, particularly within the Nasdaq 100, and will remain vigilant to the evolution of the epidemic in the U.S. and Europe.
The US presidential election in 8 days could lead to the markets remaining under pressure during the next sessions, while waiting for the results of companies in particular within the Nasdaq 100 index, such as Microsoft, Amazon, Facebook or Alphabet. week.
Furthermore, while Europe continues to fall back on the evolution of the coronavirus, the United States no longer worries about it and does not change the measures put in place, despite a further increase in risk indicators. within the world’s leading power.
Trump and Biden in the final stretch before the presidential election
Although polls increasingly show Democratic candidate Joe Biden as the winner, Donald Trump could repeat the surprise of 2016 by winning the election, despite the unfavourable polls. A situation in which Joe Biden would receive the winner, on the other hand, could lead the current president to shout fraud and question the result. This would have a strong impact on the financial markets and volatility could soar.
Beyond the Presidential elections, we will be watching the Senate and House of Representatives elections and as long as the chamber has a good chance of remaining in the hands of the Democrats, the Senate could change its majority in favour of the Democrats.
In such an eventuality and if Joe Biden won, it would facilitate the implementation of his political strategy. In the event of a victory by Donald Trump, even in this situation, this could be catastrophic for the implementation of any political measures and could again delay the vote on the new aid plan for the United States.
While the tension linked to the 3 November elections should persist, the markets will be watching the many performance releases by companies and in particular large US technology companies, most of which are components of the Nasdaq 100 index.
On Tuesday we will see Microsoft, Pfizer and Caterpillar. Wednesday, Visa and Galaad. On Thursday it will be the turn of Amazon, Alphabet, Facebook, Shopify, Starbucks, Volkswagen and Airbus in particular. Finally, on Friday we will be looking at the energy sector with Exxon Mobil, Chevron and TOTAL SA.
This new earnings season could help relieve pressure, as investors should once again be satisfied with better than expected results, regardless of whether they are, for the most part, much lower than in 2019.
Coronavirus: Europe is coming, the United States continues to ignore it
In the United States, the epidemic is resuming an upward trend, both in terms of new cases, the number of hospitalizations and the number of deaths. Moreover, after a first group within the White House that had taken Donald Trump to hospital and a second one now, particularly on the side of Mike Pence’s chief of staff, this in no way changes the administration’s lax policy. America against the virus.
Mike Pence will also travel during the week as part of the presidential campaign despite the risk.
Nasdaq 100 Index (USTech100) graphical analysis
The price of the Nasdaq 100 index is not returning to a fundamental uptrend and the double-top configuration, combined with pre-election tensions, could lead to a sharp acceleration in the decline. On the other hand, investors’ unerring hope, particularly due to the positive communication from the US administration and the absence of other investment alternatives, could again help to support the markets.
Graphically, the US index should open below the Fibonacci spread of 161.8% (fall from February to March) at 11674 to test the 11530-11500 points. Crossing the 11,500 threshold could lead to further movement towards the 100 period moving average at 11250, or even test the recent low at 11215 points.
If it stays below the MM100, the double-roof configuration could be confirmed and bring the index in contact with the lowest since July 30th, located at 10680.
To invalidate this bearish scenario and attempt to resume an upward trend, the US Nasdaq100 index will have to stay above 11600 and move above the Fibonacci extension.
