Nasdaq Composite: Powell brilliantly negotiates a first turn

(News Bulletin 247) – The Fed completed the last FOMC of the year yesterday, particularly expected after a series of statistical benchmarks showing inflation no longer being “transitory”. The word no longer even appears in communications from the Federal Reserve. The “hawk” tone (hawkish) of the Fed will have finally reassured the markets, in the sense that the cursor will have been moved sufficiently finely by J. Powell to send a clear message of fight against inflation, without brutality. In other words, the monetary turn towards increased tightening was widely anticipated by the trading rooms.

Concretely the Fed plans to end the bond buyback program in March, and to increase its rates by three quarters of a point, in three times, over the coming year. And this with the aim of fighting against inflation that is no longer temporary. Associated with the new economic projections, this strategic commitment of the Fed was not considered more “hawkish” than expected. This turn (not too tight) was anticipated. “Several former Fed members, such as William Dudley, Dennis Lockhart and more recently Narayana Kocherlakota, have published columns calling on the Fed to quickly tighten its monetary policy to bring inflation back on a more acceptable path,” noted Alexandre Baradez (IG France) before the outcome of the FOMC.

Finally, “a decision quite in line with expectations” for Ronan Blanc, Managing Analyst at Financière Arbevel. “The Fed is trying to become an actor in its monetary policy again with some success (admittedly half-forgiven fault?). And fortunately for it, the cyclical peak of inflation seems close. The longer-term question is to know at what level she could land past that peak. That’s probably where she’ll be expected. So far she’s saving time and doing it pretty well. ” A “courageous” decision, for John Plassard, (Mirabaud), for whom the Fed “is finally tackling the rise in inflation before it gets potentially out of control. Investors have welcomed this decision, betting that the Fed will not will not find itself “behind the curve” by adopting a much more hawkish (hawkish) tone and by planning 3 rate hikes in 2022.

A tone that did not prevent the Nasdaq Composite from gaining 2.15% to 15,565 points, in volumes fed, up sharply.

For the time being, the Empire State manufacturing index, like the weekly jobless claims, fell short of expectations. The US Industry Report (Production Volume and Capacity Utilization Rate) will be released at 3:15 pm.

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 flagship index of technological stocks on the American stock market has just achieved a fairly clear double support on its 100-day moving average (in orange), which more than ever constitutes a technical and graphic “justice of the peace”.

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 15792.00 points would rekindle the purchase tension. While a break of 15000.00 points would revive the selling pressure.

DAILY DATA CHART

©2021 News Bulletin 247