(News Bulletin 247) – The Nasdaq Composite index, by the very nature of its composition, rich in growth technology stocks, was heavily penalized yesterday by the resolutely offensive tone of J. Powell, at a press conference, after decisions yet without surprise.
The Fed Funds saw their rent rise by 75 basis points, to 4.00%, as widely anticipated. What weighed, on the other hand, was the clearly stated desire to postpone the idea of ​​a pause in the monetary tightening process (an option deemed too “premature”) as well as the clear warning on the prospects for achieving neutral rate. The objective of precise quantification of the latter is still delicate.
The flagship index of technology stocks on the American side fell 3.36% to 10,524 points, in a level of activity on the rise.
The latest employment figures (ADP, JOLTS), ahead of tomorrow’s NFP, as well as the latest inflation figures (PCE, CPI) clearly weighed in the balance. Result: Treasuries 10-year yields, the yield on US 10-year sovereign bonds, jumped back above the 4% threshold, to 4.193% at the time of writing.
In terms of statistics, the survey of the private firm in human resources ADP quantified the number of new jobs created in the private sector (excluding agriculture) at 239,000, well beyond the consensus. A taste, before the NFP (Non Farm Payrolls) report on Friday, which confirms the persistent tensions on the American job market. Earlier in the week, new job openings (Job Openings and Labor Turnover Survey) came in at 10.720 million, beating expectations for September. Still on the employment front, weekly claims for unemployment benefits have just been published, at 217,000 new units, still just as low. The NFP will definitely be the second major event of the week.
On the stock side, a number of tech stars were heavily penalized, with a close exactly on the lows of the session, like Apple (-3.73% to $145.03), MetaPlatforms (- 4.89% to $90.54), Netflix (-4.80% to $273), Amazon (-4.82% to $91.12) or Intel (-3.11% to $27.42) . We will recall that mechanically, the so-called growth values ​​(Growth), which investors were previously ready to pay, even dearly, are the first victims of sell-offs when sovereign yields rise.
KEY GRAPHIC ELEMENTS
The flagship index of technology stocks of the American dimension traced, on the amplitude of the body of the candle of the previous day, a candle in doji tombstone, which illustrates the breathlessness of the reaction initiated on 13/11. This candle was confirmed the next day by an elongated marubozu, a graphic illustration of the ongoing mobilization of the selling side. Friday’s session did not allow the weekly highs to be exceeded, and the harami of Monday is perplexing, especially since it was completed by a bullish engulfing, clear, certainly without transcendent volumes. Volumes woke up on Wednesday, delivering a readable bearish message, complemented by a close of the index exactly at its session lows.
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 11250.00 points.
CHART IN DAILY DATA
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