(News Bulletin 247) – New bearish access in perspective this Friday, with the danger of a new closing on the low points of the session, subject to the absence of reaction during the day, on the Nasdaq Composite index (-1 .37% to 11,066 points), still under fire from warming government bond yields. The Treasuries 10-year bonds jumped above 3.75%, at the end of a trying week marked by a very belligerent FOMC.
As a reminder on Wednesday, the Fed opted for the most widely anticipated scenario, namely that of an increase of 75 basis points, to bring the dollar’s rent to 3.25%. Two additional increases are expected by the end of the year. What penalized the market quite significantly, on the other hand, was the pessimistic nature of the revisions to the Fed’s economic forecasts, on unemployment, to 4.4% in 2023, on inflation (2025 only for the return to 2 %), and growth (almost zero this year, and 1.2% in 2023). What weigh particularly on growth records, including the index that interests us here abounds.
“After three consecutive increases of 75bp, the Fed is now trying to convince investors that it will be able to return to a slightly less sustained rate of recovery without starting to fall as quickly as anticipated by the markets” analyzes Nathalie Benatia (BNP PAM). “Communication in this area is delicate, but the fact that the futures markets on federal funds are anticipating a high point of 4.60% in March and a slower decline thereafter may mean that the exercise was partly succeeded. Jerome Powell will have other opportunities to repeat his speech, which now seems well-rehearsed.”
On the macroeconomic side, weekly claims for unemployment benefits in the United States came out at 213,000 new units, continuing its downward trend. To follow at 3:45 p.m. the PMI services and manufacturers in data flash for the month of September.
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 will melt in the heart of this zone.
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 11460.00 points.
CHART IN DAILY DATA
©2022 News Bulletin 247
I am Janice Wiggins, and I am an author at News Bulletin 247, and I mostly cover economy news. I have a lot of experience in this field, and I know how to get the information that people need. I am a very reliable source, and I always make sure that my readers can trust me.
