Nasdaq Composite: The issue of the pace of monetary tightening under the microscope

(News Bulletin 247) – How many times the Fed will hike key rates in 2022. This is roughly what traders will try to find out, or at least guess, after the FOMC on Wednesday. “The question of the number of rate hikes is at the heart of the debates. [Les opérateurs ] “now foresee three rate hikes next year, while maintaining those anticipated for 2023. The possible change in the Fed’s monetary policy trajectory has triggered a sharp increase in market volatility”, for Mabrouk Chetouane, director Research and Strategy of BFT Investment Managers. However, this number of expected increases may change rapidly. Depending on the quality of the recovery, rising prices and saturation in supply chains.

“The latest comments from Jerome Powell showed that the Fed could step up its tapering and advance the first rate hike in H1 2022.” completes Vincent Boy (IG France).

In any case, this degree of monetary tightening, the tone used and any inflections of languages ​​will be scrutinized, as the impact can be strong on growth files, in particular on tech where some valuations are stratospheric. The Nasdaq Composite index therefore has a higher sensitivity in this area than general indices such as the Dow Jones or broad indices such as the S&P 500.

On the statistical side, the latest figures for US inflation, in the sense of consumer prices, which were the statistical high point of the week, did not show any marked overheating, as the last meeting of the Fed Monetary Policy Committee (Wednesday). This Thursday it will be the turn of the European Central Bank (ECB) to complete its Board of Governors. The opportunity to refine the probabilities of a first monetary tightening by direct action on the rates as of the March deadline.

No major meeting to report to the American statistical agenda this Monday. We will wait until tomorrow with the publication of the producer price index.

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 technological 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 ask any questions. Short term:

The entry into a digestion phase, 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 was expressed, Tuesday, and Wednesday, in a larger amplitude but less strong volumes.

Neutral opinion on the scale of the only upcoming session.

The ability to “hold” the 15,000 points will once again be essential this week.

PREVISION

In view of the key graphical 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 crossing 16212.00 points would rekindle the purchase tension. While a break of 15000.00 points would revive the selling pressure.

DAILY DATA CHART

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