(News Bulletin 247) – The firmness of the tone used by the Fed, at the end of the last FOMC of the year, will have surprised a large segment of investors who expected more flexibility, in particular in reaction to the recent publication of a marked slowdown in inflation, as defined by November CPIs.
J. Powell, who spoke at a press conference after the FOMC, brushed aside hopes of a pause in the rate hike process in early 2023, an option described as “premature”. No surprise, however, in terms of the extent of the rise in Fed Funds, inflated by 50 bps to reach 4.50%.
Fed members raised their rate projections to 5.1% for 2023 and 4.1% for 2024 from 4.6% and 3.9%, respectively, at their September meeting. They also anticipate higher inflation, at 3.1% for 2023, against 2.8% previously, and at 3.5% for “core” inflation, i.e. excluding the price of energy. energy and food, against 3.1% in September.
In the aftermath, the yield on 10-year federal sovereign bonds (Treasuries 10 yrs) experienced a stress peak around 3.55%, before changing its mind. Hence an ultimately moderate decline in the Nasdaq Composite, by 0.76% to 11,170 points, weighted by emblematic growth stocks such as Intel (-1.26% to $28.26), Apple (-1.55% at $143.21), or Tesla (-2.58% to $156.80).
To be continued at 2:30 p.m., sharp statistical benchmarks: retail sales, the Empire State manufacturing index, the Philly Fed manufacturing index and weekly unemployment benefit claims
KEY GRAPHIC ELEMENTS
In the immediate future, the flagship index of technology stocks on the American side is close to the upper limit of a flag, around 11,460 / 11,500 points, beyond which a breathing zone would open, subject to growth in volumes and sectoral federation (IT, entertainment, semiconductor, robotics, IA).
FORECAST
In view of the key chart 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 a crossing of 11500.00 points would revive the tension in the purchase. While a break of 11000.00 points would relaunch the selling pressure.
CHART IN DAILY DATA
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