Dow Jones, the S&P 500, and Nasdaq price forecast ahead of renewed COVID-19 restrictions

The Dow Jones Industrial Average and the S&P 500 weakened on Friday as the prospect of renewed lockdowns in Europe and rising COVID-19 cases make investors nervous.

Austria imposed a nationwide lockdown from this Monday, and according to Germany’s Health Minister Jens Spahn, Germany is also not ruling out a new lockdown.

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Despite this, the Nasdaq Composite gained 0.4% to record closing price at 16,057.44 as strong corporate earnings keep the market in a positive mood.

E-commerce and online entertainment business continue to grow rapidly, and many big technology companies have become a supply channel for many consumers in the age of the COVID-19 pandemic.

The U.S. Consumer Price Index hit a 31-year high of 6.2% YoY in October, and the rising inflation, together with the world’s supply chains crisis, became a serious issue for the U.S. economy.

Fed Chair Jerome Powell said that high inflation would probably be transitory, but supply chain issues would likely extend well into next year.

The U.S. economy is particularly vulnerable to shortages of key parts and raw materials, and according to Federal Reserve Governor Christopher Waller, this problem may limit job gains and output growth.

Governor Christopher Waller warned that supply problems may complicate the FED decision on monetary policy in 2022. Many big companies reported they had lost sales because of supply problems, while Gary Dickerson, CEO of Chip equipment supplier Applied Materials, added:

Demand for semiconductors and equipment continues to grow as the pandemic accelerates the digital transformation of the economy, and currently, our supply chain cannot keep up.

The positive news is that Retail Sales figures for October increased by 1.7% on a monthly basis while the Industrial Production in the same month improved by 1.6%, more than doubling the market’s expectations.

The upcoming week will be light in terms of macroeconomic news; the U.S. will publish housing-related figures, and investors will continue to pay attention to the global situation with renewed lockdowns.

S&P 500 up 0.34% on a weekly basis

For the week, S&P 500 (SPX ) advanced 0.34% and closed at 4,697 points.

S&P 500 continues to trade in a bull market; still, if the price falls below 4,600 points, it would be a “sell” signal, and we have the open way to 4,500 points.

DJIA down -1.28% on a weekly basis

The Dow Jones Industrial Average (DJIA) weakened -1.28% for the week and closed at 35,601 points.

Dow Jones weakened from its record highs, and if the price falls below 35,000 points, it would be a strong “sell” signal.

The upside potential remains limited for the week ahead, but if the price jumps above 36,000 points, the next target could be around 36,200 points.

Nasdaq Composite up 1.24% on a weekly basis

For the week, the Nasdaq Composite (COMP) booked a 1.24% increase and closed at 16,057 points.

In its second-straight record finish powered by technology stocks, Nasdaq Composite closed above 16,000 points for the first time on Friday.

The current support level stands around 15,500 points, and if the price falls below this level, it would be a “sell” signal, and we have the open way to 15,000 points.

Summary

The Dow Jones Industrial Average and the S&P 500 weakened on Friday as the prospect of renewed lockdowns in Europe and rising COVID-19 cases make investors nervous. Despite this, the Nasdaq Composite gained 0.4% on Friday as strong corporate earnings keep the market in a positive mood.

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