Nasdaq after initial gain came under pressure because of comments within Federal Reserve and US Treasury press conferences
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NASDAQ - US Treasury Confirms no Guarantees. The NASDAQ saw the sharpest decline after the press conferences held by the Federal Reserve and US Treasury. At first, the price gained 1.25% reaching a new 7-month high. However, the price came under immense pressure due to specific comments within both press conferences. However, traders should note that the price is experiencing moderate bullish momentum during this morning’s futures market. Today, the price is increasing by 1.10% but is still 0.80% lower than yesterday’s price before the press conferences.
Federal Reserve Chairman, Jerome Powell, advised that additional tightening will be implemented if required
As mentioned during yesterday’s market analysis, the stock market may be supported if the US treasury confirms a “blanket” for US depositors or some kind of insurance. A different indication can significantly pressure equities. Indeed the Treasury Secretary, Janet Yellen, confirmed there are no such discussions or plans to introduce any kind of additional guarantees. Simultaneously, the Federal Reserve Chairman, Jerome Powell, advised that additional tightening will be implemented if required.
Bond yields have significantly declined, indicating that many traders do not believe the Federal Reserve will be able to justify further interest rate hikes. Inventors should note that the monetary policy is already within the “restrictive zone,” and the Fund Rate is at a 16-year high. So far, the stock market has come under pressure from no further assistance from the US treasury and the possibility of a further hike going forward. Investors fear that inflation will push the Fed to a further hike putting more strain on the banking sector, while the government provides no cushion for depositors.
The NASDAQ, on the other hand, does have some support from other fundamental factors. The stock market is supported by the dovish hike and the possibility of cycling seeing an end if inflation continues declining. Analysts have also noted that fuel costs may decrease within the following inflation data. Investors were also quick to take advantage of the discounted price. In addition, investors will start planning for the next earning season, which is only a few weeks away.
Read the first part of the update by NAGA: Treasury's press conference triggered a strong selloff in the stock market | FXMAG.COM
The NASDAQ will be particularly interesting as investors will follow the AI drive and how the tech companies have performed after significant layoffs over the past quarter. Have the layoffs managed to improve expenditure and, more importantly, earnings? The Board of Meta has already confirmed a second round of employee cuts. According to the report, ten thousandemployees will be let go, and recruiting will be limited. The company also decreased its workforce by almost 13%. Mortgage Stanley is also the latest company to upgrade their signal from hold to buy.
Chart, waterfall chart Description automatically generatedNASDAQ 1-Hour Chart on March 23rd
Regarding technical analysis, the price action continues to point towards an upward price movement due to this morning’s correction. However, investors will be cautious that the price does not decline again when the resistance level is again reached. Investors should also note that trading clouds, regression channels, and theRSIindicate a potential overbought level.
Read the third part of the update by NAGA: US dollar pressured by Euro and Swiss franc. EUR and CHF supported by data and a rate hike| FXMAG.COM
