The takeover of First Republic results in mostly flat Dow futures.
As investors process the acquisition of First Republic Bank (NYSE: FRC) at the start of a week that includes additional corporate earnings, a Federal Reserve policy meeting, and the closely watched monthly employment data, U.S. stocks are expected to open relatively steady on Monday.
The Dow futures contract was up barely 3 points at 06:45 ET (10:45 GMT).
First Republic Bank has been seized, according to American regulators, and an agreement has been reached to sell the regional lender to JPMorgan Chase (NYSE: JPM). Given that this is the third significant U.S. institution to fail in two months, this should help to ease market concerns about systemic risk.
While JPMorgan will take over the assets of First Republic Bank, including the $92 billion in deposits, it will not assume the lender’s corporate debt or preferred stock.
In premarket trading, First Republic Bank shares fell 40% after losing 97% of their value this year, while JPMorgan shares increased 2.4%.
Prior to this, on Monday, the April ISM manufacturing PMI will be released, which is anticipated to indicate that the nation’s manufacturing sector is still in recession.
DOW JONES TECHNICAL ANALYSIS DAILY CHART:
Dow Jones is currently trading in up channel.
Dow Jones is currently trading above all SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting up trend.
Immediate resistance is at 34256.20 & its immediate support level is 34319.62
HOW TO TRADE DOW JONES IN THIS WEEK
Dow Jones index is rising. Price is advancing towards the resistance zone; if price breaks through the resistance zone and maintains its position above it, further upside may be expected.