Wall Street bleeds out in build-up to critical NFP Friday
- DIA drops a further 494.42 points, or 1.86%, to end at 26,078.
- The S&P 500 index dropped 52.64 points or 1.79% to 2,887.61
- The Nasdaq lost 123.44 points, or 1.56%, to 7,785.25.
The US benchmarks extended losses on Wednesday with the Dow Jones Industrial Average, DJIA, extending the 344 points, or 1.3%, lost the prior session by a further 494.42 points, or 1.86%, to end at 26,078. The S&P 500 index dropped 52.64 points or 1.79% to 2,887.61 and the Nasdaq lost 123.44 points, or 1.56%, to 7,785.25. This has led to US stocks posting their worst start to a quarter since 2008 as investors weigh up the likelihood of a global recession.
US data in the build-up to Nonfarm Payrolls
We have seen a series of poo data from the US which is weighing on the US Dollar and US stocks in the build-up the Nonfarm Payrolls showdown at the end of the week. This week's ISM Manufacturing was the catalyst for the sell-off in stocks yesterday and today, the employment numbers for the US for the month of September were weaker than expected as well which together might be considered as a negative prelude to the NFP on Friday,
"ADP data showed just 135,000 new jobs against expectations of 140,000. Meanwhile August data was revised down sharply from 195,000 to 157,000. In Q3, ADP report just 17,000 goods-producing jobs were created, down from 148,300 in the same period last year. In the past three months 145,000 jobs have been added on average each month, compared to 214,000 for the same time last year," analysts at ANZ Bank explained.
DJIA levels
The DJIA was extending below the 200 4-hour moving average on Wednesday and embarking on a test of the daily 200 moving average just below S1 with a strong and convincing close below the 50-DMA now. The index has completed a 50% mean reversion of the August to recent swing highs that were located at 26379 that was guarding territory down to the low 26000s that meets a 61.8% retracement. From here, a break of the 200-DMA opens risk all the way back to the 38.2% Fibo retracement of late 2018 to YTD highs at 25223 and then a 50% mean reversion to the mid 24000s.