(News Bulletin 247) – The rise in 10-year government bond yields (Treasuries 10 yrs) accelerated, close to 3.50%, in the light of the Fed’s difficulties in curbing inflation, despite a hawkish attitude, maintaining strong pressure on risky assets, in particular growth stocks, very well represented within the index that interests us here.
Published yesterday, growth in US services accelerated in August, a dynamism in the main sector of the world’s largest economy which argues for continued monetary tightening initiated by the Fed since last spring.
The ISM index, which measures activity in services in the United States, stood at 56.9 points in August, after 56.7 in July, and well above analysts’ expectations, which were counting on 55. .5, a sign that the US economy is holding up despite inflation and rising interest rates.
Bets therefore remain open on an upcoming 75 percentage point hike in Fed rates. Just like for the ECB which tomorrow completes its Board of Governors, which will be followed across the Atlantic against a backdrop of the use of gas exports to Europe as a political weapon by Moscow.
To follow the trade balance figures for the month of July, structurally in deficit, expected at -70 billion dollars.
KEY GRAPHIC ELEMENTS
On marubozu black, in powerful volumes, the flagship index of technology stocks of the American dimension broke the neckline of a small figure in shoulder, head and shoulders, which signals the definitive end of the bullish leg started on June 17th. The index broke its 50-day moving average (in orange). The last time this technical event happened (08/04), the clearings accelerated: -23% until June 16, in significant volatility. In the immediate term, a short rebalancing of prices before a potential technical rebound of small magnitude is expected. Not enough to initiate buying positions, however.
FORECAST
In view of the key chart factors that we have identified, our opinion is neutral on the Nasdaq Composite index in the short term.
We will take care to note that a crossing of 11990.00 points would revive the tension in the purchase. While a break of 11460.00 points would relaunch the selling pressure.
CHART IN DAILY DATA
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