(News Bulletin 247) – The readjustment this week on the Nasdaq Composite index is assessed in the light of the relief caused by the confirmation of a marked slowdown in inflation across the Atlantic.
The consumer price index, for the widest product base, came out perfectly within the target, at +6.5% on an annual basis. What bring a certain relief without blowing the cork of the bottle of champagne. The confirmation is that of a marked slowdown in the rise in prices on the other side of the Atlantic, even if the road to a landing in inflation will still be long. The fight, through a firm monetary policy, will clearly have to continue.
“The market remains confident that the Fed will not raise rates as much as it indicated in the December projections. Fewer rate hikes create favorable market dynamics for risk (equities, credit and duration included) against a drop in the dollar”, says Axel Botte, International Strategist at OSTRUM AM. “However, it cannot be excluded that the reopening of China will induce an early rebound in oil prices. The improvement in the outlook is already visible in industrial metal prices. In this case, market expectations would reconverge towards the levels indicated by the FOMC…”, warns the strategist.
An opening on the tone of caution is expected this Friday, due to a lackluster start to quarterly quarterly reports on the banking side, especially on the side of Citigroup and BoA.
To follow at 4:00 p.m. the preliminary data (U-Mich) of the consumer confidence index and inflation forecasts.
KEY GRAPHIC ELEMENTS
In the immediate future, the flagship index of technology stocks on the American side, although in a downward trend, is evolving in a tidied up whose limits are well defined, between 10,250 and 11,450 points. Navigations from one to the other of its terminals, for the next few weeks, are expected, before the affirmation of a directional. The high wick of the candle built on Monday January 10 attests to this. Resistance forces are gradually settling near the 50-day moving average (in orange), the direction of which will be closely monitored.
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 11250.00 points would revive the tension in the purchase. While a break of 10250.00 points would relaunch the selling pressure.
CHART IN DAILY DATA
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