Nasdaq Composite: An NFP report on the use of (too much?) good quality

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The NFP report on American private employment, the statistical highlight of this second part of the week, which has just been published, can only provide grist for the mills of the most cautious Fed executives. Let’s first dissect this Non Farm Payrolls report, to say the least firm in its content. If average hourly wages, at +0.3%, did not move away from the target, job creations in the private sector outside agriculture amounted to more than 300,000, exploding the target to 212,000 (275,000 creations in February). Finally, the unemployment rate, expected to be stable at 3.9%, fell to 3.8% of the active population. In the wake of the publication, 10-year Treasuries rose again to 4.39, to levels not seen since November, but the probabilities of a federal rate cut in June remained stable according to the CME’s FedWatch tool. Group, at 58.1%.

As a reminder, two members of the Fed, Neel Kashkari, president of the Minneapolis Fed, and Thomas Barkin, head of the Richmond Fed, spoke this week adopting a very cautious approach, insisting on the fact that the Federal Reserve had time. And the president of the Atlanta Fed, Raphael Bostic, estimated this Wednesday that the persistence of inflation risked forcing the American central bank to only lower its rates at the end of the year.

Furthermore, the situation on the geopolitical front is weighing on high PER assets. Joe Biden raised his voice yesterday regarding Israel’s attitude in the Gaza Strip, in a telephone interview with the Israeli Prime Minister. While Iran’s Supreme Leader Ayatollah Khamenei said Wednesday that Israel would be “slapped” after the airstrikes it blamed on the consular annex of the Iranian embassy in Damascus, in which seven people died on Monday. Revolutionary Guards.

What arouse fear in the markets? Not far from here. But “the American indices suddenly dropped, and the VIX almost reached 17 while it was trading at less than 13 at the end of last week, an increase of 30% in less than a week.” notes Alexandre Baradez (IG France).

Note on the values ​​side, the massive decline of AMD, semiconductor manufacturer, whose stock depreciated by 8.26%.

KEY GRAPHIC ELEMENTS

After two dojis school on March 28 and April 1, a occasional breath of prices below the 20-day moving average (in dark blue) is expected at this stage of the ascent. A security barrier is ensured, right down to the 50-day moving average (in orange), the underlying trend curve which is currently hovering in the immediate vicinity of 16,000 points. Below that would be the “NVidia” gap dating from February 22.

Note that the encompassing bearish school of April 4, in the sense of the Japanese candle typology, sent a significant short-term alert.

FORECAST

Based on the key chart factors we have mentioned, our view 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 resistance at 16550.00 points.

DAILY DATA CHART