Nasdaq Composite: Alphabet loses its Latin and must review the ABC of its AI

(News Bulletin 247) – The Nasdaq Composite continued its nervous part of yoyo (-1.68% to 11,910 points yesterday), in solid volumes, on firm price levels. Volatility that is measured in the light of the rises and falls in temperature of 10-year sovereign bond yields, 10-year Treasuries. Its decline below 3.60% should allow a start in the green this Thursday, where investors will have to deal with weekly registrations for unemployment benefits, at a level still as low, below 200,000 new units at 196,000, close to expectations at 191,000. The messages confirm the state of intense tension in the US job market which, as a reminder in the private sector, created more than 510,000 jobs in January.

Yesterday the formation of a structure in harami was supported by the disappointment of Alphabet (-7.68% to $99.37), after an incomprehensible blunder on the part of a digital juggernaut. The ex-Google, which is launching its conversational AI tool to compete head-on with Chat GPT, released a promotional video in which the robot is wrong about a question that has no trap for AI, about the discoveries that has enabled the deployment of the James Webb Space Telescope. For Deutsche Bank, the stock market plunge that followed this odd “shows the high stakes and the competitive pressures of new technologies”.

So much for the zoom on today’s value on Wednesday. But the underlying market psychology remains relatively bullish on US tech growth stocks, illustrating what Alendre Baradez (IG France) calls “a divergence […]between the markets (especially the equity markets) and the clearly stated intentions of the central bankers.”

“Jerome Powell recalled last Wednesday that there was “no room for complacency”, that the markets should “reflect the degree of monetary tightening put in place”, that according to the Fed’s expectations, it will not there would be no rate cut this year […] Jerome Powell recalled the notion of “higher for longer” for rates, meaning that even after reaching the terminal level, rates would remain high for a relatively long period before being lowered. The Fed Chairman made it clear that there would be “more” rate hikes as part of the market was convinced that March would mark the last 25 basis point rate hike. Without forgetting the references to the job market which remains “extremely tense” to use the words used.

As a reminder, at the end of the first FOMC of the year last week, the Fed announced a 25 basis point increase in its Fed Funds, bringing them to 4.75%, for the upper limit. “While Jerome Powell stuck to his previous outings, arguing that it was still too early to take a break from rising rates and that we shouldn’t claim victory too quickly in the fight against inflation, investors did not consider the speech hawkish enough to revise their optimistic expectations, preferring to focus on certain more accommodating passages such as acknowledging that the disinflation movement was faster than expected”, for Thomas Giudici, head of bond management at Auris Gestion.

KEY GRAPHIC ELEMENTS

We did not witness an island reversal on Friday, due to the high shadow drawn. What accredit the scenario of a volatile consolidation rather than a reversal. The idea of ​​a pullback on 11,450 points remains entirely credible at this stage. In any case, the new working technical band is between 11,450 and 12,260 points.

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 12260.00 points would revive the tension in the purchase. While a break of 11450.00 points would relaunch the selling pressure.

CHART IN DAILY DATA

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