It will be interesting to see if it can maintain the break and potentially start a new range and return to previous highs around 26800 and beyond to all time highs, which are not that far away.
Throughout February and March the US30 index seemed to have been content to trade in a narrow range roughly between 25400 and 26200, before the recent break. In early February the index consolidated in a narrow range right above the significant level of 25,000 before it began its slow climb higher. It was able to resume what has become a very steady climb higher which started back in December.
At the end of January, the 25000 level offered some resistance to the index however this was quickly broken through, only for the level to prop up the index since, and this level remains key. December was several weeks the US30 index would rather forget as it fell very sharply down through any support at the 25,000 level and then also through the 24,000 level down to that 18 month low.
According to the U.S. Bureau of Economic Analysis, the U.S. economy grew at a 3.2% annual rate in the first quarter, which was greater than expected and its best growth to start a year in four years, exceeding 3% for the first time since 2015. Economists polled by Dow Jones expected growth of 2.5%. Federal economic analysts attributed most of the first quarter’s growth to increases in consumer spending, businesses building their inventories, and increased exports. Personal spending was only up 1.2%, two tenths more than expected as an increase in spending on services and nondurable goods offset a decline in spending on durable goods. Exports rose 3.7% in the first quarter, while imports decreased by 3.7%. Disposable personal income increased by 3%, while prices increased by 1.3% when excluding food and energy. Overall prices climbed by 0.8% in the first quarter. The latest data comes at a good time with lingering U.S.- Chinese trade uncertainty and weak economic data almost everywhere else.Many will see this latest strong U.S. data as an insurance policy against further global economic weakness.
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