NAS100 Subdued after Strong Factory Activity

  • NAS100
    (${instrument.percentChange}%)

NAS100 Analysis

Wall Street did not mind the inflation persistence as indicated by Friday's PCE update, but was spooked by yesterday's unexpectedly strong ISM Manufacturing PMI, in another manifestation of the "good news is bad news" approach. Factory activity expanded for the first time since September 2022, providing another signal of a robust economy.

CME's FedWatch Tool still assigns the highest probability to 75 basis points of cuts to begin in June, but conviction diminished and chances of a shallower path increased after the PMI report [1]. The Fed has no reason to rush cuts with sticky inflation, strong economy and robust labor market.

NAS100 is cautious as result and there is scope for sub EMA200 moves that would pause the bullish momentum, but the downside appears well protected, starting with the rising daily Ichimoku Cloud. Despite its conservative approach to removing monetary restraint, the Fed maintained the projection that points to three rate cuts this year [2]. This continues to support NAS100, which can push for higher highs towards the 19,000 mark.

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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

1

Retrieved 02 Apr 2024 https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

2

Retrieved 28 May 2024 https://www.federalreserve.gov/monetarypolicy/fomcpresconf20240320.htm

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