(News Bulletin 247) – The first part of the session should rhyme with great caution this Wednesday, before the monetary policy decision (8:00 p.m., Paris time), and the traditional press conference (8:30 p.m.). Beyond a decision to increase by 50 bp the Fed Funds widely expected, it is the tone that will be scrutinized, and the elements of language used, able to refine the trajectory of rate increases in a complex environment. As Emmanuel Auboyneau (Amplegest) recognizes, “the two uncertainties linked to the duration of the war in Ukraine and the importance of the wave of Covid in China make the analysis uncertain in the short term.”
“In both cases, a rapid improvement would have immediate disinflationary effects (via raw materials for Ukraine and the restoration of the supply chain for China). A prolongation of these two hazards would only anchor the inflation at high levels. analyzes the manager.
And on the single question of the American GDP in the first quarter, “if the publication, prima facieat -0.4% in quarterly variation of the American growth (-1.4% in annualized against +1% expected) marks a clear slowdown compared to the last quarter (+6.9% in annualized), the reading in more detail of the components shows a more resilient image of the American economy”, nevertheless qualifies Thomas GIUDICI, Co-head of bond management at AURIS Gestion.
“Indeed, GDP was mainly impacted by a booming trade deficit (-3.2 pts), aimed at rebuilding inventories of consumer goods, as well as lower government spending. At the same time, consumption continues to hold up well, with, for example, a further increase in consumer spending in April (+1.1% against +0.6% expected and +0.6% the previous month), despite high inflation in almost all goods.”
The Fed will have to take into account the chronic tensions on the employment market, tensions which themselves generate inflation. Ahead of Friday’s release of the federal NFP report (No Farm Payrolls), investors have just had a “taste” with the publication a few minutes ago of the ADP survey. The private human resources firm highlighted 247,000 job creations in the private sector (excluding agriculture) last month, well below expectations (more than 380,000).
KEY GRAPHIC ELEMENTS
The thin trading range that we identified between 13,330 and 13,838 points was broken under conditions of volumes, volatility, and very significant candles. the marubozu traced on Thursday 04/21 shows in particular a mobilization of the selling side throughout the session, until a close almost exactly on the low points, opening the way to a bearish target CT at 12,640 points. The latter was broken, after a hesitantly nervous hesitation on the second part of last week. We specify on Friday that “the shape of the weekly candle will be important.” It is indeed very unattractive, and it is also the fourth time in four weeks that the index has closed on its weekly lows. A pullback later, the warnings come on.
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 12640.00 points.
CHART IN DAILY DATA
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