S&P 500, Nasdaq 100 – Costs, Charts, and Evaluation
- Recession fears are pushed into the background for now.
- Nasdaq 100 stalling at pattern resistance.
- S&P 500 stumbles at a two-month excessive.
The most recent US Jobs Report has put the brakes on US equities with the discharge displaying an sudden surge in hiring. A bumper 528k new jobs had been created in July, pushing the unemployment fee down to three.5%, the bottom stage since February 2020.
Friday’s labor report has now pushed again all ideas of the Fed slowing down the tempo of rate of interest hikes because the central financial institution continues to focus on stubbornly excessive inflation. Current speak of a Fed pivot on charges, resulting from a weakening financial system, shouldn’t be borne out by the most recent NFP report which exhibits the US jobs market in impolite well being. Whereas right this moment’s launch will permit the Fed extra flexibility to hike charges greater and quicker, it is just one knowledge level. A have a look at the US Treasury market exhibits the UST2s/10s curve inverting additional, now round -40bps, and this continues to level to a recession within the US, regardless of the semantics utilized by the Fed to say all is okay. As all the time, knowledge releases stay key, whereas Fed chatter additionally must be intently listened to.
Subsequent week, all eyes can be on Wednesday’s inflation report with core inflation anticipated to tick greater once more. If this report exhibits inflation falling, nonetheless, it might gas ideas of a ‘comfortable touchdown’ within the US, a goldilocks second for the Federal Reserve.
For all market-moving financial knowledge and occasions, seek advice from the DailyFX calendar
The current rally within the Nasdaq 100 has examined and failed its first try to interrupt pattern resistance off the late-December 2021 excessive. The tech-heavy indices has been on a surge of late, rallying over 20% off the June 16 low. The current ‘purchase the dip’ mentality over the past six weeks seems to be like it might be completed for now and merchants could quickly change over to ‘promote the rally’ mode that served them so properly for the reason that finish of 2021.
Nasdaq 100 Day by day Value Chart – August 5, 2022
Chart through TradingView
The S&P 500 rally has additionally been purchased to a halt after making a recent two-month excessive this week. The indices has printed a sequence of upper lows over the past 6-8 weeks, and whereas the S&P 500 will stay underneath stress, the draw back for the indices will probably be extra restricted than the tech-heavy Nasdaq.
S&P 500 Day by day Value Chart – August 5, 2022
Chart through TradingView
Retail dealer knowledge present 37.63% of merchants are net-long with the ratio of merchants quick to lengthy at 1.66 to 1. The variety of merchants net-long is 3.09% greater than yesterday and 0.15% decrease from final week, whereas the variety of merchants net-short is 0.77% greater than yesterday and 17.15% greater from final week.
We usually take a contrarian view to crowd sentiment, and the actual fact merchants are net-short suggests US 500 costs could proceed to rise.Positioning is much less net-short than yesterday however extra net-short from final week. The mix of present sentiment and up to date adjustments offers us an additional blended US 500 buying and selling bias
What’s your view on US Fairness Markets– bullish or bearish?? You may tell us through the shape on the finish of this piece or you may contact the creator through Twitter @nickcawley1.