The NASDAQ Struggles to Maintain Short-Term Gains!

Posted on June 28, 2024 by Michalis Efthymiou

– Oil prices are set to rise for the third consecutive week due to escalations in the Middle East.
– The VIX drops by more than 4.11%, indicating increased risk appetite in the stock market. Investors are now focusing on employment data and earnings reports.
– Stocks surge as the latest Core PCE Price Index hits its lowest level in six months.
– The Nikkei225 and NASDAQ are the best-performing indices this week.

USA100 – The NASDAQ Struggles to Maintain Short-Term Gains!

The NASDAQ reached its highest price in over a week as the latest inflation data suggests lower interest rates. The Core PCE Price Index dropped from 0.2% to 0.1%, marking its lowest level in six months. This brings the annual rate down to 2.6%, slightly above the Fed’s 2.00% target.

As a result, the likelihood of an interest rate adjustment next month rises to 10.3%, and to 64.00% for September. This is generally positive for the stock market and continues to support higher risk appetite. The improvement in investor sentiment is also reflected in the VIX Index, which fell more than 4.11% and is approaching previous lows. Additionally, the US 10-Year Bond Yield declined by 15 points, providing further support for the technology sector.

However, investors have three main concerns. First, if oil prices continue to rise, it could trigger panic and more persistent inflation. Second, escalations in the Middle East between Lebanon and Israel could lead to the direct involvement of Iran and Turkey in the conflict, causing supply issues. For now, this situation is keeping investors on edge but not in a panic.

Lastly, investors need to be cautious of the strong decline that followed the rapid price increase after the PCE announcement. Due to bearish volatility, the price is forming a lower low. The key question is whether the price will break the resistance level at $19,871.80. Nonetheless, the two-hour chart indicates a longer-term bullish trend, but most investors would prefer to see all three US indices rise before speculating on upward price movement.

Among the 25 stocks that hold more than a 1.00% weight, only 32% are trading lower. This does not indicate a significant decline, but investors will keep monitoring any changes.

Will The SNP500 Break The Recent Price Range?

Posted on June 27, 2024 by Michalis Efthymiou

– US GDP increased by 1.4%, matching analysts’ expectations. The USD Index fell 0.17%, making it the worst-performing currency of the day.

– US Weekly Unemployment Claims remain high but are consistent with previous expectations.

– Durable Goods Orders grew by 0.1%, providing support for the US Stock Market.

USA500

The US Stock Market rose after the release of the latest GDP, Durable Goods, and Unemployment Claims data. However, the medium-term outlook still suggests a sideways price movement. Investors are looking to gather more data ahead of the upcoming earnings season to strategically position their portfolios.

Key focus areas for investors include tomorrow’s Core PCE Price Index and the latest NFP Employment Change. Analysts predict the Core PCE Price Index will fall from 2.7% to 2.6%. If it doesn’t decline, the stock market may face pressure due to the lack of data indicating a rate adjustment. Currently, the market is pricing in a rate cut for September 2024. Many analysts believe the USA500 could be overpriced if this cut does not materialize.

While the S&P 500 shows signs of bullish movement, there are indications of a wide price range. For instance, 52% of the top 25 most influential stocks are trading lower in pre-market hours, and the index remains below a recurring resistance level.

Meanwhile, the actions of the US Federal Reserve remain uncertain. Despite a slight decrease in the consumer price index from 3.4% to 3.3% in May, officials are still considering maintaining tight monetary policy for an extended period and possibly increasing borrowing costs if necessary. Upcoming economic data, including today’s GDP and Friday’s May personal consumption expenditures price index, could influence the Fed’s decisions.

Today’s economic data aligns with a bullish short-term outlook, indicating stability, economic growth, and no upward pressure on inflation. Most assets are increasing in value during the European Cash Open, signaling strong investor sentiment and higher risk appetite. Additionally, the VIX, a well-known sentiment index, is trading lower, which typically supports the stock market.

The main concern for investors is the resistance level at $5,492.10, yet the price continues to trade above the 75-Bar EMA, indicating a short-term upward trend.

Market Analysis: The NASDAQ And The US’s Drop In Inflation!

Posted on June 12, 2024 by Michalis Efthymiou

– US inflation fell to 3.3%, down from 3.4%, and below most expectations.

– The NASDAQ trades 1.09% higher than the day’s opening price, reaching an all-time high and gaining 17.30% in 2024.

– 88% of NASDAQ components are trading higher after the latest inflation release, as investors increase exposure to riskier assets.

– The US Dollar Index declines, making it the day’s worst-performing currency due to an expected rate cut in September 2024.

The NASDAQ showed a 0.68% bullish price gap immediately after the US inflation data release. This positive price movement suggests an upward trend and a higher likelihood of a rate cut.

For the first time since November 2023, monthly prices did not increase, bringing inflation down to 3.3%. While the inflation rate is still higher than expectations, it hints at a possible decline in the next 2-3 months. Another encouraging factor is the Core Consumer Price Index, which was lower than expected (0.02%). The Core Inflation Rate in the US is now at 3.4%, the lowest since the COVID-19 pandemic and the Ukraine-Russia conflict.

This low inflation data, particularly the lowest Core CPI in over three years, might prompt the Federal Reserve to adopt a more accommodative stance. Consequently, consumer demand is likely to remain strong, and shares could become more attractive to large institutions. Broadcom, the best-performing NASDAQ stock, rose more than 2.50% before the market opened.

Investors are now focusing on the Federal Reserve’s press conference this afternoon. They are eager to hear a more dovish tone from the Fed and any comments on a potential rate cut in September 2024 or by the end of the year. If the press conference offers further clarity, stocks and the NASDAQ are likely to see additional gains. The latest movement from the CMExchange FedWatch Tool is the probability of a rate cut in september rapidly increasing. The September possibility rose from 50.00% to 62.00%.

Market Analysis: NASDAQ Avoids The Bears Due To NVIDIA Strength

Posted on June 4, 2024 by Michalis Efthymiou

The latest news capturing investor attention is the recent Purchasing Managers Index (PMI) report, a key leading indicator. In contrast, other economic data are considered lagging as they reflect past performance rather than future sentiment. Both the ISM Manufacturing PMI and Manufacturing Prices fell short of expectations and were lower than the previous month. Analysts caution investors not to overreact, noting that this would only be significant if employment also declines. Furthermore, the Final Manufacturing PMI reading of 51.3 still signals economic expansion, and lower oil prices could support stocks in the long term.

A slight decline in the PMI is not necessarily negative for the stock market, provided there is no increased risk of a recession. Reduced consumer demand and economic activity might prompt the Federal Reserve to consider more than one rate cut in 2024. Currently, 53.0% of large traders are anticipating this, up from 49.0% before the data release. Additionally, most experts expect the regulators to cut the interest rate twice over the year, totaling 0.50%.

The situation in the bond market has stabilized somewhat, and this week there is a local downtrend: 10-year bonds are trading at a yield rate of 4.491%, down from 4.601% recorded last week, the yield of 20-year bonds was 4.711% after 4.816%, and the yield rate on 30-year bonds fell to 4.635% from 4.721% a week earlier.

However, technical analysis suggests there is still a possibility of price declines. The price failed to stay above key sentiment lines and did not form a higher high. Currently, the Relative Strength Index (RSI) is at 50.30, indicating the potential for a price reversal. In addition to this, the top 9 most influential company are witnessing their stocks decline with the largest decline coming from Broadcom (-0.75%). If this continues, traders may aim for the previous low (support level).

If the price rises to a new high breaking above $18,638.50, the momentum could indicate upward price movement again. Otherwise, bearish crossovers on the 5-minute chart will continue to indicate valid downward momentum. Currently, European stocks are declining and if they keep falling, investors can use this as an indication of a risk-off sentiment.

Market Analysis: The Day’s Best Performing Currency!

Posted on May 27, 2024 by Michalis Efthymiou

The best performing currency of the day is the New Zealand Dollar, while the worst performing is the Swiss Franc. However, due to the larger spread, which is traditional to this pair, investors hold on for larger price movements. On the 2-hour chart the price of the exchange has continuously traded above the 75-Bar EMA since the 13th May and is trading almost 3.50% higher over the past month.

The price of the exchange rate has consecutively been on the rise for six consecutive weeks which is uncommon for the NZDCHF. However, investors should also note that the price is trading 5.30% lower than the average price seen over the past 3 years. Therefore, investors potentially may be looking at longer term gains due to the low entry levels. However, in order for the trend to continue the New Zealand economy will need to maintain stability with high interest rates.

The upward price movement is largely due to the high inflation in New Zealand and the central banks reluctancy to indicate a rate adjustment in the near future. In addition to this, the Swiss National Bank also is believed to be one of the most bearish central bank globally. New Zealand’s inflation rate is continuing to decline and is not witnessing a slowdown like the US. However, the inflation rate remains at 4.00% significantly higher than Switzerland’s 1.4% inflation rate.

New Zealand’s first quarters core retail sales index rose 0.4% from –1.6% previously, better than analysts’ neutral forecast, and retail sales rose 0.5% from –1.9% previously and –0.3% expected. The April figure for exports was 6.42B New Zealand dollars and imports 6.32B New Zealand dollars, increasing the trade surplus by 91.0M New Zealand Dollars.

Today the New Zealand Dollar Index is trading 0.41% higher. However, investors continue to monitor the rise in tensions between China and Taiwan which potentially could change the sentiment towards certain currencies if escalations worsen.

Market Analysis: Inflation Has Investors Holding Their Breaths!

Posted on May 14, 2024 by Michalis Efthymiou

The price of the Dow Jones ended 0.19% lower on Monday but is trading 0.09% higher during this morning’s Asian and European Session. however, the performance during the US session will depend on the PPI report. Of the top 15 most influential stocks, 12 are trading higher while 3 are trading lower this morning.

In the pre-trading hours, Home Depot emerges as the top performer, gearing up to unveil its earnings data shortly. Analysts anticipate a boost in Earnings Per Share from $2.82 to $3.60, with Revenue expected to reach $36.65 Billion. While the company has surpassed expectations over the past year, concerns linger over lower sales figures. Despite trading 1.00% lower this year, the stock boasts a robust dividend yield of 2.65%. A positive earnings report could drive stock prices higher, lending significant support to the Dow Jones.

However, the spotlight remains on this afternoon’s Producer Price Index and tomorrow’s Consumer Price Index, both pivotal events for investors. Hopes are pinned on lower inflation figures, as a decline could fuel an uptick in the USA30 and other indices. Conversely, steady or higher-than-expected readings could disappoint shareholders, especially considering their potential impact on interest rates. If inflation rises, the Federal Reserve may maintain interest rates for 2024 unless circumstances change. According to recent surveys, 11% of market participants anticipate no interest rate cuts this year.

USA30 – Technical Analysis and Signals

Price action is not yet the best indicator due to the upcoming events, which can significantly change the momentum and direction. Nonetheless, the price is currently trading above VWAP and Cumulative Delta indicates more buy orders than sell orders. The price also trades above the 75-BAR EMA and above the 50.00 level on the RSI. According to momentum indicators and price action, buy signals are likely to materialize above $39,588.00. While bearish signals may develop if the price drops below $39,413.34.

GBPUSD – The UK Economy Moves Out of a Technical Recession!

Posted on May 10, 2024 by Michalis Efthymiou

The GBPUSD over the past 24-hours has been influenced by three factors: the monetary committee’s votes, the Governor’s guidance and the UK’s latest GDP figure. The GBPUSD first fell to a 2-week low due to the higher number of votes for an interest rate cute. However, the GBPUSD has since risen 0.77%. Therefore, how can traders view the price movement and the latest developments?

A significant factor influencing pricing is the likelihood of the regulator adjusting its policy in either June or September. A rate cut in September would bolster the GBP, keeping rates higher for a longer duration compared to the Eurozone and other competitors. The Monetary Policy Committee’s votes suggest the BoE is nearing readiness to cut rates. Additionally, the Governor expressed a desire to gradually move away from a restrictive policy, which in the UK is defined as 5.00% and above.

The price increase can be attributed to the Governor’s indication of a higher likelihood of a September rate cut over June. Moreover, the robust economic growth reported this morning diminishes the likelihood of a June cut, as there is less pressure on the BoE to support a stagnant economy. Consequently, a rate cut is now expected in September 2024, aligning with the Federal Reserve’s policy guidance. However, the Governor also suggested that the Central Bank may cut rates more than what the market is currently anticipating.

The Federal Reserve and US Employment Data

The US Dollar on Thursday evening was considerably pressured by the Weekly Unemployment Claims, which normally has a limited affect. The US Unemployment Claims rose to 231,000, higher than predictions of 212,000 and the highest since November 2023. Therefore, the US has seen lower NFP data, higher unemployment rate and now higher unemployment claims. This has investors questioning if the US employment sector may be weakening for the first time since raising interest rates.

If so, the Federal Reserve may consider a cut in July. Currently, the CM Exchange’s tool shows a 30.8% chance of a cut in July, if this figure rises, the US Dollar could potentially weaken. So far the price is showing a bullish bias but is hovering within a neutral signals. If the price increases above 1.25352, the buy signal is more likely to materialize.

Is Apple stock worth the hype or a Sell?

Posted on May 4, 2024 by Olumide Adesina

The iPhone maker released its second-quarter fiscal earnings. Even though iPhone sales were down about 10%, the company’s earnings per share and revenues were marginally better than anticipated. Along with executives touting the potential of Apple’s AI initiatives, the company revealed the details of its largest-ever share repurchase in U.S. corporate history during its earnings call.

Apple’s stock increased 6% on Friday to settle at $183. 38..A positive technical sign was the volume increasing the day before along with the price; overall, 87 million more shares were traded than the previous day. The short-term and long-term moving averages for Apple stock indicate buy signals, indicating a favorable outlook for the iPad maker.

Additionally, the relationship between the two signals indicates a general buy signal when the short-term average is higher than the long-term average. There will be some support for corrections down from the lines at $172.68 and $171.06.

Sell signals will likely be generated if any of these levels are broken below. On Friday, April 19, 2024, a pivot bottom point was used to provide a buy signal; it has since increased by 11.14%. Until a new top pivot is found, more rising is suggested.

Moreover, the three-month Moving Average Convergence Divergence (MACD) indicates a purchase signal. Price and volume are increasing simultaneously. This is regarded as a reliable technical signal.

The massive consumer electronics company Apple (AAPL) is dealing with several issues that have affected Apple shares, including a lawsuit filed by the US Department of Justice alleging antitrust violations. Despite its $110 billion share price, many investors may still be unsure if AAPL stock is a good investment at this time.

The Justice Department on March 21, filed a lawsuit against Apple, claiming that the Cupertino, California-based business had broken antitrust laws with its exclusive iPhone and App Store guidelines. According to the lawsuit, Apple’s actions make it more difficult for Americans to switch cell phones, stifle app innovation, and impose exorbitant prices on customers, companies, and developers.

In terms of AI, particularly generative AI, Apple is lagging behind its competitors in the Big Tech space. Profits may suffer temporarily because of the company’s expensive AI program.

After ten years of labor, Apple decided to stop developing autonomous electric vehicles in late February. Apple allegedly invested over $10 billion in the Apple automobile project before discontinuing it to concentrate on artificial intelligence.

Although Apple has several encouraging signs, market participants still don’t think they are sufficient to recommend the company as a buy. It should be viewed as a hold candidate (hold or accumulate) in this role for the time being while more development is being made. Since the last evaluation, we have lowered our analytical conclusion for this stock from a Buy to a Hold/Accumulate candidate due to a few minor shortcomings in the technical picture.

Market Analysis: Markets In The “Red” As Fed Countdown Begins!

Posted on April 30, 2024 by Michalis Efthymiou

The price of Gold has declined 1.10% and is experiencing its strongest decline since April 22nd. The reasoning behind the decline is de-escalation in the middle east while the US Dollar strengthens. in addition to this, economic data continues to indicate a more hawkish Federal Reserve.

This afternoon, the US released its latest Employment Cost Index, which stood at 1.2%. Surpassing Wall Street’s expectations by 20%, this index measures both private and business labor salaries. Such increases typically exert upward pressure on inflation and suggest an imbalanced job market.

Consequently, the Fed is less inclined to adjust interest rates. Following the release, over 77% of the market anticipates no rate cuts before September 2024. Additionally, analysts expect Friday’s NFP reading to remain consistent. Consequently, Gold is experiencing reduced demand and fewer buy orders.

The price is currently trading below the 75-Bar Exponential Moving Average and at 36.50 on the RSI. Both indicate sellers are controlling the market in the short-medium term. However, investors are also cautious that the price is trading close to support levels from the 23rd to 25th April 2024 and the divergence signal on the 15-Minute Chart. Based on the Fibonacci retracement levels, if the price drops below $2,306.10, the price may see sell signals strengthen.

The Federal Reserve’s statement and press conference tomorrow will significantly impact the exchange rate. If the Chairman suggests that the possibility of a rate cut in the summer is decreasing, the US Dollar may further appreciate. Additionally, the rise in bond yields is also bolstering the Dollar’s strength.

The NASDAQ Trades Lower And Continues To See Mounting Pressures

Posted on April 19, 2024 by Michalis Efthymiou

The USA100 is trading a bit lower than its opening price today, sticking to its usual downward trend. On the 30-minute chart, the index has been making lower highs and lows for the last 9 price waves, even with some recent positive movement. Even though there was a small increase during the European session, it’s still lower than the previous high of $17,600. If the price drops below $17,247, it could keep going down. Currently, technical analysis is illustrating a bearish bias based on the main Moving Averages and Oscillators.

Big factors right now are tensions in the Middle East and companies’ earnings. A recent attack on Iran isn’t good news for the stock market, but things would have to get worse to really hurt it. Netflix just shared their earnings, reporting $9.37 billion in revenue, which was more than the expected $9.27 billion. Their Earnings per Share also beat estimates at $5.28 compared to $4.51. But even with good numbers, their stock dropped by 6.50% in pre-trading because they said they won’t confirm new subscriptions anymore. Other companies like Proctor and Gamble and Amex also released their earnings and both saw their stocks go down after.

Looking at the performance of individual stocks, 7 out of the top 25 most important ones are trading lower, suggesting a downward trend. Investors hope this continues in the US session. On a positive note, the US Dollar Index and US Bond Yields are both lower, which is good for the stock market.

US Unemployment Claims are still low, showing that the job market is strong. The head of the Federal Reserve Bank of Cleveland, Mrs. Mester, recently said that they’ll only lower interest rates when consumer prices start moving towards their target of 2.0%. The Fed being strict continues to be a problem for the stock market, but if next week’s earnings reports are better than expected, it might ease up a bit.