Although the macro calendar for today is very modest - and apart from US wholesale stocks (16:00) no significant data will be published - the US100 index may record higher volatility, driven by the statements of the three Fed members who will speak today (2 PM BST, Perli, 3:30 PM BST Bostic, 7:30 PM BST Waller, 9 PM BST Kashkari) and a general improvement in global market sentiment. What's more, U.S. companies (mainly the financial sector - Wells Fargo (WFC.US) or BlackRock (BLK.US) ) will report financial results this week. Although they are not part of the Nasdaq 100 - the index may also react to potentially larger reactions of the S&P 500.
Over the next few weeks, the Nasdaq will have 'a lot to prove' to market bears, who have become extremely active after a euphoric Q2 - concerns around the momentum of the U.S. technology sector grew supported by rising yields and a strong dollar. Has the market very quickly and fully 'discounted' the prospects of a new AI-driven tech bull market? Investors can expect more answers in the coming weeks. Today, bulls were supported not only by falling yields and rising expectations of a Fed pause in November after yesterday's statements by Fed members, but also by news of a broader stimulus to be implemented in China's economy. The International Monetary Fund raised its forecast for U.S. GDP to 2.1% in 2023 and 1.5% in 2024, pointing to improving business investment and still growing consumption.
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Create account Try a demo Download mobile app Download mobile appLooking at the chart of Nasdaq100 (US100) contracts, we see that the bulls have managed to permanently break above the psychological resistance near 15,000 points and the resistance zone near 15,100 points. A breakout above it may indicate a growing chance of a test of the 15,500-point level where we see potentially further significant levels set by previous price reactions. Significantly, the volume of buyers (green bars) clearly prevailed on the US100 over the past sessions, and this has remained essentially unchanged even in the face of a post-weekend correction dictated by the rise in oil prices and uncertainty surrounding the conflict in the Middle East. Breaking through the $15,500 level could open up the US100 to 16,000 points - a successful earnings season on Wall Street would be needed for that.
Source: xStation5
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