(News Bulletin 247) – The rebound in the index yesterday (+2.05% to 11,051 points), under the effect of a relative lull in government bond yields, will have fizzled, and the pre-opening this Thursday suggests a start to the session in the dominant color of the moment, namely red. The Treasuries 10-year yields on 10-year US government bonds actually fell back below the 4% mark this week – a first since 2008 – to stabilize at around 3.80%.
For the time being, the operators have just taken note of the final GDP data for the second quarter, unsurprisingly contracting by 0.6% from one quarter to the next, and new weekly registrations for unemployment benefits, falling back below symbolic bar of 200,000, further illustrating the recurring tensions on the job market, tensions themselves a source of inflation, which the Fed absolutely wants to combat with an aggressive restrictive monetary policy, at the risk of putting a sudden brake to activity.
But “the recession, necessary to absorb the rise in prices, is not […] not for now”, in the words of the Carmignac strategists. “And the current Fed Chairman, Jerome Powell, is probably not done surprising the markets with his aggressiveness.”
“Active bond management certainly remains a major component of diversified management in an inflationary environment,” they continue. But who are the first victims of this new market matrix? Growth records (Growth), of which the index which interests us here abounds.
To be monitored tomorrow are PCE prices, the Fed’s flagship measure of inflation.
KEY GRAPHIC ELEMENTS
On the graphic, technical and chartist side, the 11,460 points, put under surveillance, dropped, in conditions of volatility and volumes giving credence to the bearish message. A break in the chartist neck line is fully validated, giving the signal to enter a new working base, between 10,560 and 11,460 points. Very quickly the oscillations melted in the heart of this zone. A nervous phase translated by hatching in short tidy is the preferred option for future sessions.
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 11460.00 points would revive the tension in the purchase. While a breakout of 10560.00 points would revive selling pressure.
CHART IN DAILY DATA
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