Last week's data showed a significant deceleration in headline CPI inflation, while the stickier core also eased notably. Markets had never really embraced the 50 bps worth of hikes, as implied by the Fed's latest projections, expecting only one 0.25% increase later this month. After the CPI report, they seem to be focusing on the timing and extent of cuts.
NAS100 benefited from the optimistic policy expectations and extended its gains to new 2023 highs this week. This has brought it closer to the 16K handle, although the 2021 record highs (16,770) may prove elusive in the near term.
With the Fed's quite period in deploy and a relatively light economic calendar, all eyes will be on the new earnings season. The EV King Tesla Motors reports on Wednesday, after having already announced record Q2 deliveries. Streaming pioneer Netflix releases its results on the same day, with progress on the ad-supported tier and password crackdown, being some of the focal points.
NAS100 is contained today ahead of the earnings and next week's Fed decision. Investors may be overly optimistic around the monetary path though, as strong labor market and robust economic growth call for prolonged restrictive stance. From a technical prospective the advance of NAS100 looks stretched and pressure back to 15,301 would be reasonable, although deeper correction below the EMA200 (14,934-10) would require a significant deterioration in sentiment.
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.