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Dow Jones Index gains steam ahead of key earnings, US inflation, and NFP data

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Dow Jones Index gains steam ahead of key earnings, US inflation, and NFP data - 2

The Dow Jones Index continued its strong bull run, reaching a new all-time high on Tuesday, as investors waited for the upcoming corporate earnings and key macro data.

Summary

  • The Dow Jones Index continued its strong bull run ahead of the upcoming earnings.
  • It has jumped by 37% from its lowest level in April last year.
  • The US will publish key macro data on Wednesday and Friday.

Dow Jones, which tracks 30 diverse companies, reached a record high of $50,520, three days after it crossed the important $50,000 milestone. Other blue-chip indices like the S&P 500 and the Nasdaq 100 continued their uptrend.

Dow Jones Index rallies

The Dow Jones has done well in the ongoing earnings season. Data compiled by FactSet show that most American companies have reported strong financial results, with 76% of S&P 500 companies reporting a positive surprise.

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The blended earnings growth of all S&P 500 Index companies that have reported is 13%. If this is the final number, it will be the fifth consecutive quarter of double-digit growth.

Dom key companies in the Dow Jones will publish their numbers this week. The most notable ones will be Cisco and McDonald’s. Other notable companies to watch this week will be Applied Materials, Arista Networks, T-Mobile, Shopify, and Ford.

Dow Jones Index gains steam ahead of key earnings, US inflation, and NFP data - 2
Dow Jones Index chart | Source: TradingView

US stocks to react to key macro data 

The Dow Jones Index will also react to upcoming U.S. macroeconomic data.

The first will be the delayed U.S. non-farm payrolls report, which comes out on Wednesday. Economists polled by Reuters expect the upcoming report to show that the economy created 70,000 jobs in January, higher than the 50k it created in December. The unemployment rate is expected to remain at 4.4%.

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These numbers come as some major American companies have recently announced layoffs. Amazon is shedding over 16,000 layoffs on top of the 15,000 it announced last year. 

Other top companies, including UPS, Dow Inc., Verizon, Citigroup, and Salesforce, have announced large layoffs. According to Challenger & Gray, companies announced over 108k layoffs.

The most important data will come out on Friday when the United States will publish the latest consumer inflation report. Economists expect the data to show that inflation softened a bit in January, with the headline CPI falling to 2.5%. 

A lower inflation figure than expected will be highly bullish for the Dow Jones as it will lead to higher odds of Federal Reserve interest rate cuts this year.

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Crypto World

CFTC Chair Says Agency is Ready to Oversee Entire Crypto Market

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CFTC Chair Says Agency is Ready to Oversee Entire Crypto Market

Michael Selig, US President Donald Trump’s nominee leading the Commodity Futures Trading Commission (CFTC), said the agency was prepared to oversee the entire $3 trillion crypto industry, with no timeline for Congress to pass a crucial market structure bill.

In a Wednesday statement about his first 100 days as CFTC chair, Selig said that the commission was “ready to take responsibility” for the crypto market and reiterated his claim that it was the sole regulator to oversee prediction markets.

His comments come as the US Senate considers the CLARITY Act, a crypto market structure bill that has been effectively stalled in committee amid discussions over stablecoin yield and other issues.

“The same regulatory clarity being delivered to the crypto industry is being developed for prediction markets, which can serve as powerful tools for information discovery and are regulated by the CFTC under the Commodity Exchange Act,” said Selig.

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Under Selig, who was confirmed by the Senate in December, the CFTC has adopted many policies signaling that the agency would soften its enforcement and regulation of digital assets compared to previous administrations. In March, the agency announced a memorandum of understanding with the Securities and Exchange Commission (SEC) as part of efforts to coordinate on regulation, including digital assets.

Related: Crypto exchange KuCoin agrees to $500K settlement, ending CFTC case

Although early drafts of the market structure bill suggested the legislation could give the CFTC additional authority to oversee digital assets, the SEC is expected to continue regulating cryptocurrencies it considers to be securities.

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Lawmakers pressing CFTC on insider trading claims over prediction markets

US state authorities and federal lawmakers have been targeting prediction market platforms like Kalshi and Polymarket over alleged violations of gaming laws and claims of politicians using insider information to profit.

While many of the state-level actions continue to be litigated in court, Selig has claimed that the CFTC has “exclusive jurisdiction” over prediction markets and threatened legal action against any challenges to its authority.

In a Tuesday event, CFTC enforcement director David Miller said that the agency’s position was that event contracts on prediction markets were not “gaming” but rather “swaps” that fall under its purview.

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Some lawmakers have also proposed legislation to ban elected officials with insider information from profiting from event contracts after suspicious trades on military actions involving Iran and Venezuela.

Magazine: A newbie’s guide to surviving crypto winter