(News Bulletin 247) – Difficult awakening for the Nasdaq Composite after a weekend made prolonged by the closure of Wall Street yesterday due to Independence Day (4th of July, Independence Day), amid fears of an entry into recession in the United States, the latest activity indicators, particularly industrial ones, as well as the drop in consumer morale, leaving trading rooms in a delicate situation as important monetary events approach.
“The fears of recession are becoming more and more significant in the United States”, summarizes Thomas Giuduci, co-head of bond management at AURIS Gestion. “Household spending for the month of May thus came out below expectations (0.2% against 0.4% expected and 0.9% the previous month). Restated for the price increase, it fell by -0.4% in volume against +0.7 % the previous month. This trend was also confirmed by the marked drop in the ISM manufacturing index for June, which nevertheless remains in an expansionary phase but with a contraction in new orders, a first since May 2020.”
ECOFI analysts and strategists summarize the situation with the following aphorism: “It is not good to be a central banker this summer!” The Minutes, the traditional minutes of the Fed’s last FOMC meeting, will be studied closely tomorrow. As a reminder, following the last meeting of the Monetary Policy Committee, the Fed Funds were raised by 75 basis points, a scenario which had been (very partially) digested by the market.
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. A rebalancing of forces is anticipated, for the moment at the level of the body of the candle on Friday 06/24, between two gaps (June 10 and 13), ie a thin tunnel between 11,300 and 11,610 points. Below Tuesday’s low points, the situation would deteriorate rapidly, with an effect of attraction, even suction, of the June 21 gap below 11,000 points.
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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