Nasdaq Composite: Nervous swings in long-term sovereign bond yields

(News Bulletin 247) – The ebb at the very beginning of the week in long-term sovereign bond yields should allow the Nasdaq Composite index to open in green territory on Monday. On Friday, the flagship index of technology stocks on the American side fell 1.69% to 11,394 points, in relatively heavy volumes, with no gap, however, between the opening and closing, after the publication of an indicator of worrying inflation. The 10-year Treasuries then flirted with 4%.

The PCE index (for personal consumption expenditures) rose in January by 0.6% against a target of +0.4%. What tense the Fed insofar as the PCE traditionally constitute for the Fed, beyond the CPI, a reference barometer to gauge the dynamics of prices.

The strategists of DNCA Finance summarize, in the light of this inflation, their view of the market: “Swaps on FED rates are adjusting upwards: up to 5.3% expected in July, more than 60 basis points above the Bank’s effective rate Loretta Mester (Cleveland FED) openly supports a further 50 basis point hike The chances of a first FED rate cut at the end of the year are receding Schnabel (ECB) thinks that the markets are too complacent with inflation.”

Note in terms of statistics on Monday, the severe decline in orders for durable goods, 4.5% in January at an annualized rate. A figure heavily penalized by the only elements of transport equipment.

KEY GRAPHIC ELEMENTS

Without strong reaction and confirmed by the volatility even during the session, the old range between 10,250 and 11,450 points is for the sessions to come the basis of predilection. The oscillator is in full navigation from a high limit to a low limit.

FORECAST

Considering the key chart factors we have mentioned, our opinion is negative on the Nasdaq Composite index in the short term.

This bearish scenario is valid as long as the Nasdaq Composite index is trading below the resistance at 12260.00 points.

CHART IN DAILY DATA