Nasdaq Composite: Will Powell start pushing the cursor towards Hawkish?

(News Bulletin 247) – Hawkish yes, but a little, or a lot? … The degree of monetary tightening, in deeds as well as in language, will be the key to risk appetite on growth files for the end of the year, while the Fed completes this Wednesday the last FOMC (for Federal Open Market Committee). And this without a context of inflation that takes hold.

As a reminder, published on Friday, in the broadest product base, prices increased more than expected in November (+ 0.8% monthly), against + 0.9% in September. In data corrected for volatile elements (food and energy), prices rose 0.5%, in line with expectations, according to the latest data from the US Bureau of Labor Statistics. And a new inflationary marker was released on Monday with the producer price index in the United States, up 0.8% monthly for the largest basket, showing a warming greater than that predicted by the target ( market consensus).

So what should we expect from the Fed meeting? Two 25 basis point hikes in federal rates in 2020 is the assumption that seems to be holding the line for the time being. In any case, Alexandre Neuvy, Managing Partner of Amplegest is clear: “Finished the speech of unconditional support and flexibility if necessary, lately the FED has shown its desire to accelerate the end of aid and to initiate a rate hike, and the whole question is going to be timing and scale. “

For Indosuez Wealth Management, the powerful institution headed by J. Powell “should take a more hawkish than at previous meetings. The recent rise in prices has indeed made some members of the Fed more talkative on the subject and the new points of the Fed should reflect this more hawkish tone: the projections of the FOMC on the interest rates could indeed include a hike. 50 basis points for 2022 and 1.75 for 2023 and 2.5 for 2024, which would make the rate outlook for 2024 closer to the long-term forecast of 2.5%. ”

Verdict at 8:00 p.m. for the actual monetary policy decisions and at 8:30 p.m. for the Fed press conference.

In the immediate future, operators will have to deal with a disappointment on the consumer front. Retail sales (excluding automobiles) rose in November by only 0.3%, against a target of + 0.9% and especially a previous month at + 1.7%, according to the Census Bureau.

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.

A court terme:

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. A broader consolidation is looming. A first bearish acceleration within this consolidation was expressed, Tuesday, and Wednesday, in a larger amplitude but less strong volumes.

Negative opinion on the scale of the only session to come. The ability to “hold” the 15,000 points will once again be essential this week. The index left a transverse gap (that of 07/12). A break of 15,000 would accelerate the releases.

PREVISION

In view of the key graphical factors that 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 quotes below resistance at 15792.00 points.

DAILY DATA CHART

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