Nasdaq Composite: Persistent tensions on US employment

(News Bulletin 247) – The statistical highlight of the session is the famous NFP (for No Farm Payrolls), which stands for the monthly US employment report. It has just been published, as traditionally, one hour before the opening of Wall Street, the first Friday following the end of the month, and its content is in line with the previous ones: it shows continued tensions on the ‘use. Only the slight increase in the unemployment rate, to 3.7% of the labor force, can be seen as a sign of the effectiveness of the Fed’s monetary tightening measures.

For the other main indicators, the average hourly wage rose more than expected, at +0.4% monthly, and the number of job creations in the private sector (excluding agriculture) exceeded 260,000, beyond expectations as well.

As a reminder on Wednesday, the Fed Funds saw their rent rise by 75 basis points, to 4.00%, as widely expected. 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. In any case, it exceeded 5% after this monetary deadline.

“The labor market is the key variable,” slice Christophe Morel, chief economist at Groupama Asset Management. “Currently, in the United States, the demand for labor exceeds the supply by about 5 million, which is fueling wage inflation in the private sector of 6%. To guarantee its inflation target of 2%, the Fed must bring wage growth back to a rate of 4%.Unless we assume a sharp rise in the participation rate, which seems unlikely to us, the central bank must then “force” a fall in the demand for labor by provoking a cyclical recession. , the Fed needs to bring its key rate well above 5%.”

Note that this weekend, the East Coast of the United States will switch to winter time, therefore, there will be no more “lag”, namely that the opening of Wall Street will again take place at 3:30 p.m. (Paris time), and not 2:30 p.m., as was the case this week.

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 day before, a candle in doji tombstone, which illustrates the breathlessness of the reaction started 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 Monday’s harami is puzzling, especially since it was completed by a clear bullish encompassing, certainly without transcendent volumes. Volumes woke up on Wednesday, delivering a readable bearish message, complete with the index closing 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

©2022 News Bulletin 247