US Market

The tech-heavy index is on the front foot today, as the failure of Silicon Valley Bank may constrain the US Fed’s tightening prospects and markets now have lowered their expectation around the policy path

FXCM’s USBANKS basket dropped yesterday. The basket was down around 9.6% for the day. Shares in JPMorgan Chase and Wells Fargo were down 5% and 6%, respectively.

Watch today’s US Open for insights on Fed Chair Powell’s testimony, its impact on market pricing around the central bank’s policy path and more

There is a certain resiliency in the stock market. The SPX500 has charted a higher trough followed by a higher peak. This is an uptrend. The stochastic is a momentum-based indicator. That it has fallen through the 70 level denotes that the SPX500 has lost momentum.

Chair Powell opened the door to an acceleration in the pace of tightening during his two-day Congress testimony, but the tech-heavy index shows resiliency as market now brace for Friday’s jobs report

The 2s-10s yield curve has been inverted for 9-months and is currently at -107 bps. The last time the yield curve was this far into inversion territory was in the early 1980s. An inverted yield curve often forewarns of an economic recession, as it suggests that investors expect short-term interest rates to fall, and normalise the curve. This can be a signal that the economy is headed for a downturn.

Watch today’s US Open for insights on the dovish hike by the Reserve Bank of Australia, persistent hawkish commentary by ECB officials and more, as markets brace for Fed Chair Powell’s Congress testimony

Regarding the weekly time frame, the NAS100 has charted a higher trough, followed by a higher peak. This is an uptrend. The index has pulled back over the past weeks but now finds itself at resistance turned support.

Watch today’s US Open for commentary on the recent hotter than expected US PCE inflation, the EU/UK trade agreement over Northern Ireland and more

The daily NAS100 (left) has a weak bias. It is trading in its bearish channel between the lower blue and red bands. Also, its underlying momentum is to the downside; its stochastic has dropped below 20. The longer it stays there, the greater the prospects for lower prices.

Yesterday’s GDP data show that the US economy decelerated at a higher pace than previously reported. Q4 GDP was revised to 2.7%, which is down from the previously reported number of 2.9% and lower than Q3’s 3.2%. The revision is due to lower consumer spending and exports, with personal consumption expenditure up 1.4% compared with the prior forecast of 2.1%.