Nasdaq Composite: Omicron bestows a precious gift on J. Powell …

(News Bulletin 247) – With the appearance of this new variant of the Covid-19 coronavirus; considered “worrying” by the World Health Organization, the Fed is now in an uncomfortable situation: it must place the cursor thinly enough not to let prices slip while the “transitory” nature of inflation does not ‘makes more sense, and not to weaken the recovery when confidence, although still strong, can be weakened by possible restrictive measures.

Federal Reserve boss Jerome Powell again cast a chill by acknowledging, in response to a question about the appropriateness of retaining the term “transient” to qualify the current spike in inflation, that the time has come to withdraw that word. … For the president of the Fed, recently chosen for a second term, if the price increases are broadly linked to supply problems, these increases have spread more globally and the risk of durably higher inflation s ‘is increased. In other words, it is a bit of the whole scenario put forward in recent months that has been demolished, and the banker recognizes that we will have to discuss a more rapid withdrawal of unconventional support measures, without even talking about a rate tightening.

But seen with Fed President’s “glasses”, the appearance of this new variant would not ultimately grant the most precious good: time? This is the thesis defended by Jean-Jacques Friedman – Investment Director of VEGA Investment Managers, a subsidiary of Natixis Wealth Management. “If caution is needed in the short term, Omicron is giving back time by allowing J. Powell not to succumb to the pressure of recent statistics and to settle for more aggressive monetary tightening. In fact, investors are forecasting now two key rate hikes by the Fed in 2022, compared to three previously. “

What feed a rebalancing of forces on growth issues, particularly in the technological sector. The Nasdaq Composite (-1.55% to 15,537 points yesterday at the close) is expected in green territory at the opening. A trend fueled by the figures of the employment survey by the human resources firm ADP, which reports 534,000 job creations in the private sector, excluding agriculture. Verdict Friday with the Federal NFP Monthly Report.

We will be following closely today the ISM manufacturing PMI at 4:00 p.m. and crude stocks at 4:00 p.m. Very clear disappointment yesterday, with targets completely missed for the Chicago PMI which fell sharply to 61.8 and especially for the consumer confidence index (Conference Board), to 109.5.

KEY GRAPHIC ELEMENTS

Regarding the substantive technical framework, at this stage unchanged:

Since October 28 and the registration of new historic highs after those of September 07, the flagship index of technology stocks of the American stock market has systematically closed on the high points of the session, in strong volumes, which contracted only very little . The buying side, fully mobilized, does not raise any questions.

A court terme:

The entry into a phase of digestion, the structure of which will be instructive for the future, should be considered. We are still in the process of defining the framework, and the amplitude, of future consolidation. Wider consolidation is looming. A first bearish acceleration within this consolidation has been expressed.

Positive opinion on the scale of the only session to come.

PREVISION

In view of the key graphical factors that we have mentioned, our opinion is positive on the Nasdaq Composite index in the short term.

This bullish scenario is valid as long as the Nasdaq Composite Index quotes above the support at 15420.00 points.

DAILY DATA CHART

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