Fundamental
Overview
The soft NFP report on Friday was again faded
completely by the stock market because of the focus on Fed rate cuts. In fact,
the dovish bets on the Fed increased and the market is now expecting three rate
cuts by year-end (68 bps).
Moreover, we have also an 8%
probability of a 50 bps cut in September but that will likely happen only if we
get a soft CPI report today. In that case, the stock market might get another
boost to push into new all-time highs.
The bigger picture hasn’t
changed much as the stock market continues to see better growth ahead despite
all the doom and gloom coming from analysts and economists. The market doesn’t
care about what has happened in the past quarters but how things are likely to
evolve in the next quarters.
And those positive
expectations are supported by the upcoming rate cuts and the fact that things
are not as bad as people think. We just have a frozen labour market most likely
due to the uncertainty created by Trump’s policies in the first half of the year.
That is now behind us, and the rate cuts could spur growth and improve economic
activity, which is a good thing for the stock market.
Nasdaq
Technical Analysis – Daily Timeframe
Nasdaq Daily
On the daily chart, we can
see that the Nasdaq has been basically ranging for over a month, although the
trend continued to be skewed to the upside. The price is now trading near the
all-time highs and this is where we can expect the sellers to step in with a
defined risk above the high to position for a drop into the 23,050 level. The
buyers, on the other hand, will want to see the price breaking higher to
increase the bullish bets into new highs and will look to buy the dip in case
the price pulls back into the 23,050 level.
Nasdaq Technical
Analysis – 4 hour Timeframe
Nasdaq 4 hour
On the 4 hour chart, there’s
not much we can glean from this timeframe as the price action inside ranges is
generally choppy with no clear levels where to lean onto. We will need to zoom
in to see some more details.
Nasdaq Technical
Analysis – 1 hour Timeframe
Nasdaq 1 hour
On the 1 hour chart, we can
see that we have a minor upward trendline
defining the bullish momentum on this timeframe. The buyers will likely continue
to lean on it to keep pushing into new highs, while the sellers will look for a
break lower to target a drop into the 23,050 level next. The red lines define
the average daily range for today.
Upcoming Catalysts
Today we get the US CPI report and the latest US Jobless
Claims figures. Tomorrow, we conclude the week with the University of Michigan
Consumer Sentiment report.