NAS100 to New Records on Good-Enough Inflation & AI Optimism

  • NAS100
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NAS100 Analysis

The artificial intelligence boom fueled last year's Wall Street rally, spilling over into 2024. Nvidia crushed again its quarterly results and full-year guidance last week, renewing the momentum. Optimism is maintained this week, helped by the earnings of C3.ai.

The Enterprise AI application software startup is at the forefront of this revolution and its stock (AI.us) jumped nearly 25% on Thursday after strong results and outlook. Revenues grew 18% y/y to $78.4 million in the quarter ended January 31 (Q3 FY24), on the back of high demand for AI-powered enterprise solution, although losses widened. Executives also raised their outlook for the full fiscal 2024, expecting revenues to increase by around 33.5% y/y and operating losses to more than halve. [1]

More imprtantly, markets cheered the latest inflation data, as headline PCE at 2.4% y/y and core at 2.8% y/y marked the slowest growth in nearly two year. This slight and unsurprising moderation in inflation satisfied markets, sending NAS100 to new record highs. Bulls look poised to take out 18,264 and loom towards 19,000.

On the other hand, the PCE report showed only small slowdown in the yearly figures and an acceleration on a monthly basis. Furthermore, the Fed is in no rush to start lowering rates given strong economy and labor market. Markets have adjusted their pricing, pushing back the timing to June and the extent to 75 basis points of cuts this year. As such, we could see another test of the EMA200 (at around 17,550), but the downside appears well protected and sustained weakness looks hard under current conditions.

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 14 Jul 2024 https://ir.c3.ai/news-releases/news-release-details/c3-ai-announces-third-quarter-fiscal-2024-financial-results

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