NAS100 Cheers the Fed’s Dovish Hold, Turns to Apple & NFPs

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NAS100 Analysis

The Fed stayed on the sidelines for second straight meeting on Wednesday and although it kept more hikes on the table, there was a clear dovish tilt to its rhetoric. Tighter financial conditions and rising yields are doing some of the bank's work for it, despite strong economy, tight labor market and elevated inflation. Chair Powell had recently stated succinctly that policy is not sufficiently restrictive to restore price stability, but refrained from repeating that view yesterday, in one of the dovish highlights.

Bond and equity markets cheered the dovish hold, with 10-year treasury yields dropping on Wednesday and NAS100 posting its best day since summer, also helped by strong tech earnings. Chip designer AMD posted strong results, expecting its Artificial Intelligence chips to become revenue contributors starting from the current quarter. Qualcomm's financials were underwhelming, but the firm offered upbeat guidance, in another sign of stabilization in the smartphone market. [1]

NAS100 extends its relief rally today, trying to retake the EMA200 (black line) and the initiative. This will allow it to chase new 2023 highs (15,346), but the upside contains multiple roadblocks and its previous visits above the EMA200 were short-lived.

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On the other hand, the Fed kept more tightening in play and may still need to hike further. Moreover, the Relative Strength Index points to overbought condition, which can contain the rise and create pressures. As such there is scope for another breach of the 200DaysEMA (at around 14,250), but further losses that would test 13,842 now have a higher degree of difficulty.

There are also key upcoming events ahed, which can determine the path of NAS100. Tech giant Apple reports today after the close, at a challenging period with a slowdown in revenues and stock decline. The employment report follows on Friday. The labor market is coming into better balance, but is still tight and the 336,000 jobs added in September marked the biggest gains since the start of the year.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

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Retrieved 21 Feb 2024 https://d1io3yog0oux5.cloudfront.net/_3f16d02223b493ad17154208f479612f/qualcomm/db/773/7349/file/FY+2023+4th+Quarter+Earnings+Release.pdf

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