(News Bulletin 247) – Unsurprisingly, the Fed raised its Fed Funds by 25 basis points yesterday, following a meeting of the Monetary Policy Committee, which saw the Fed having to juggle between reassuring elements, such as signs of a slowdown in price increases, and less reassuring signs, such as persistent tensions on the employment front. A generally mixed tone, far from lukewarm however, which will have reassured investors on growth assets, files which the index which interests us here abounds.
Christian Scherrmann, US Economist at DWS, nevertheless notes that “the phrase ‘continued increases in the target range will be appropriate’ has not been changed and indicates the Fed’s willingness to tighten monetary policy further.”
The Chairman of the Fed insisted heavily, in a press conference, on the extreme tension of the labor market, an essential barometer to watch in an inflationary period. Yesterday in terms of statistics, if the job news (JOLTS) once again exceeded expectations, the ADP firm’s survey, on the other hand, showed a very clear decline in job creations in the private sector. Verdict tomorrow with the NFP report, monthly federal employment report.
“While an economic slowdown may argue for a pause at the May meeting, a significant easing in labor markets is needed before the Fed shows any willingness to cut rates. 2023. We don’t expect it before the start of 2024.”, continued Christian Scherrmann.
Beyond the central banks, the market appreciates the announcements of Meta, the parent company of Facebook, which announced stricter control of its costs and 40 billion dollars in share buybacks.
KEY GRAPHIC ELEMENTS
A major technical and graphic fact, the flagship index of technology stocks on the American quotation is in the process of crossing (still to be formally confirmed) the upper limit of a wide range (range of expression of quotations between 10,250 and 11,450 points). The message sent is positive provided that rapid reintegration, in closing data, does not occur. This reinstatement is almost effective, as the test is still in progress. As seen above, the index continues to trace nervous oscillations near a major technical zone at 11,450 points, which we are switching to support.
FORECAST
Considering the key chart factors we have mentioned, our opinion is positive on the Nasdaq Composite index in the short term.
This bullish scenario is valid as long as the Nasdaq Composite index is trading above the support at 11450.00 points.
CHART IN DAILY DATA
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