(News Bulletin 247) – “Certain Fed doves have recently declared that they were surprised by the “high level and persistence of inflation”, in connection in particular with these global logistical tensions. This ends up reinforcing the market’s conviction that the Fed will have to normalize its monetary policy dynamically,” retains Alexandre Baradez (IG France).
“It is therefore a much faster normalization of monetary policy than the previous one that will take place in the coming months. And the American markets have started to integrate this development since the beginning of the month with a rebound in rates and a decline in growth stocks and in particular technology stocks.
While the scenario of three episodes of federal rate hikes over the year 2022 seems certain, since the particularly firm tone of the last Minutes, report of the December FOMC, a scenario with 4 hikes is not excluded. The boss of JP Morgan expects the realization of this scenario: Jamie Dimon anticipates that inflation will remain well above the Fed’s 2% target in 2022 and therefore bets on more than 4 rate hikes from the central bank this year, which will lead to more volatility.
The stocks that are “paid” the most, namely mainly the solid records of American tech whose results are expected to increase in the long term, are in the front line when a stock market decline is brewing. This does not mean that the underlying bullish momentum is in jeopardy. But that the risks of correction are real, and that the amplitude of this correction must be assessed in the light of the initial advances…
To continue to seduce, the test of quarterly (and therefore annual) results will be decisive. Among the heavyweights of the index, Netflix will open the ball tomorrow.
In terms of statistics yesterday, the manufacturing index of the NY Fed (Empire State) collapsed to -0.7, completely missing expectations. The score had not visited negative territory since June 2020. The Federal Reserve Bank of New York specifies that “delivery times have continued to lengthen and order books to expand. Labor market indicators indicated a moderate increase in employment and a longer average working week. Both price indices fell, but remained high. Looking ahead, however, companies remained optimistic about improving conditions ahead. the scale of the next six months”.
To follow on the agenda this Wednesday, as a priority, housing starts and building permits in the United States at 2:30 p.m.
KEY GRAPHIC ELEMENTS
The oblique line symbolizing the underlying trend was broken, and after a pullback on January 12, the index started to fall again, with investors mobilizing throughout the session. A serious gap is now brewing, confirming entry into a corrective phase. Without a quick reintegration of 15,000 points, a gradual slide towards 14,180, then 13,330 points, would be the working matrix for the next few weeks.
PREVISION
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 15000.00 points would revive the tension in the purchase. While a break of 14445.00 points would relaunch the selling pressure.
CHART IN DAILY DATA
©2022 News Bulletin 247
Source: Tradingsat
I am currently a news writer for News Bulletin247 where I mostly cover sports news. I have always been interested in writing and it is something I am very passionate about. In my spare time, I enjoy reading and spending time with my family and friends.
