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Wednesday’s accounts from the Fed’s last meeting confirmed the higher-for-longer narrative, but the tech-heavy index finds support, with the help of encouraging forward guidance by Nvidia
Markets fell yesterday, with the US30 declining 1.67% on the day. The decline shows concern regarding the Fed’s rate hiking path, with the “higher for longer” paradigm pricing in, as the flash PMIs came in hotter than expected.
It is reacting slower than expected, but the NAS100 IS reacting to higher real rates.
After a profitable week, the German index starts the current one with caution amidst lack of catalysts, but a series of economic data is due over the following days
The tech-heavy index faces headwinds after yesterday’s US CPI inflation report and hawkish Fed remarks that support the recent more aggressive market expectations around the terminal rate
The SPX500 charted a higher trough and a higher peak on its weekly time frame. This is an uptrend. Its stochastic is in its upper quintile (green rectangle), suggesting bullish momentum. The longer time frame is meaningful; the index’s primary trend is positive.
The fear index (weekly chart) suggests the market is too complacent. It has flashed a potential pullback.
The US30 chart is on the cusp of moving back into its bullish channel between the upper blue and red bands. A cross into this region is positive.
Chair Powell’s speech sparked two-way action and consolidated the recent market-alignment with the Fed’s projected terminal rate, but we did not really get anything that new nor overly hawkish and NAS100 retains its bullish bias
FXCM’s DAX cfd, GER30, has charted a strong bullish reversal pattern.
After Friday’s blowout employment report, markets are now pricing a higher Fed terminal rate, which weighs on the stock market, along with recent mostly poor tech earnings and US-China tensions
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