The initial reaction of the dollar and the US stock market to the approval of the financial package

The initial reaction of the dollar, the Treasury and the US stock market to the approval of the financial package

Investors are keen to buy and hold US dollars. In global markets and this month, the US dollar index has climbed to its highest level in four months. The US Senate has approved Biden's $ 1.9 trillion bailout package, and the House of Representatives is expected to approve it today and sign it by the end of the week.
Under a previous US government support program, $ 600 in subsidies were able to support US retail and consumer spending. This time, a $ 1,400 support payment is planned and is expected to support the US economy more than ever. According to the US government, approximately 98% of those who received the $ 600 payment will also receive the $ 1,400 government payment. In the meantime, the benefits for the unemployed have been extended. US government support, along with widespread vaccination in the United States, will support the US economic recovery.
Yesterday, the US stock market showed a vague performance in response to the approval of the government financial package. While the Dow Jones industrial average rose, the S&P 500 and NASDAQ stock indexes fell. It seems that in the current situation, investors are not interested in buying shares of technology companies. The US dollar has also reacted positively. US 10-year Treasury yields also rose above 1.60 percent. From a fundamental analysis point of view, the US dollar is expected to continue to grow and the main focus of the market will be on US inflation indicators. US inflation data will be released on Wednesday. Given that energy prices rose sharply in February, US inflation data is expected to be stronger than market forecasts.

What is the Dow Jones Index and what does it do?

What is the Dow Jones Index and what does it do?

The Dow Jones Industrial Average is an industry average of the US stock index, abbreviated DJI, and shows price fluctuations of 30 companies operating in the United States.

This index was founded by Charles Dow almost a century ago, and that is exactly why investors use this index to compare their performance in the stock market.
What companies does Dow Jones consist of?
Shares of well-known American brands operating in finance, oil and gas, public services, consumer goods, technology and telecommunications, and skin care form a weighted price index.

This means that the shares of higher value companies will have a greater impact on market value, and similarly, lower value shares will have less value on market value. In other words, a stock with a higher value and volume constitutes 70% of the market value.

It is worth noting that the stocks of companies such as Amazon, Facebook and Alphabet are not included in this index due to the high weight of their revenue streams.
Dow Jones Index Applications

    It is a factor for monitoring market conditions. Because this index, as one of the main indicators, creates a correct understanding of the stock market for investors.
    Reduces investment risk. In fact, by buying this index, you can experience a diverse and low-risk investment.
    It is a factor in monitoring the performance of the investment. For example, if the profit from your portfolio is consistently higher than Dow Jones, it indicates that you have made the optimal investment, and vice versa.
    The future trend of stocks determines mutual funds and ETFs. In fact, given the beta, it can be measured that the market value of a company's stock against Dow Jones will increase or decrease.