Nasdaq Composite: At the dawn of a week rich in benchmarks

(News Bulletin 247) – The Nasdaq Composite index remained relatively stable on Friday after the NFP employment report. The American economy managed to create 372,000 jobs in the private sector (excluding agriculture), well beyond expectations, without unduly booming wage dynamics (+0.3%). As for the unemployment rate, it remains stable at 3.6% of the active population, marking almost full employment, on its pre-Covid levels.

Sebastian Paris Horvitz, of Banque Postale Asset Management, notes, however, that “this tight labor market is reflected in a surge in wages.” It is precisely this fear of an entry into a price/wage spiral that is the fear of the Fed. “Few believed in this push, including the Fed a year ago. Indeed, as has been the case for at least the past two decades, the dominant idea was that the ability of workers to demand higher wages had become structurally weak, and that, moreover, that the price increases that we saw in the rebound period from the end of the pandemic were only temporary.There was therefore no danger of seeing demand for ‘indexation of wages to prices’.

“Today, we know, this reasoning has proven to be false. In the United States, the economy has gone into overheating, pushing wages up.”

If the statistical program of the day is almost empty, the rest of the week will be rich in this regard, with the NFIB index tomorrow (small businesses), the consumer price index on Wednesday, the producer price index Thursday, retail sales and US consumer confidence (U-Mich) in preliminary data Friday.

This week will also kick off the publications at the end of the first semester. A first salvo from the United States is expected with PepsiCo on Tuesday or Delta Air Lines on Wednesday, followed by JPMorgan and Morgan Stanley on Thursday then BlackRock, Citigroup and Wells Fargo on Friday.

KEY GRAPHIC ELEMENTS

The flagship index of technology stocks on the American side is still in a deep bearish phase, tracing a pattern oblique neckline chartist, within a bearish bias corridor. The pattern remains heavily bearish within the channel. The next highly psychological threshold is at 10,000 points. Negative opinion immediately, in the very short term. The technical board backdrop remains bright red.

FORECAST

Considering the key chart factors we have mentioned, our opinion is negative on the Nasdaq Composite index in the short term.

This bearish scenario is valid as long as the Nasdaq Composite index is trading below the resistance at 12140.00 points.

CHART IN DAILY DATA

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