Stock market: Nasdaq 100 tests major resistance, the economy is in the clear line
Although the next seasons of American technology are not so bright, investors were attracted by the prospect of Microsoft or Amazon in the coming months, and overflowing in the relaxation of long-term American stocks after the information that seemed to be a little dangerous. from the chairman of the Federal Reserve on Wednesday evening. Indeed, even after the Fed raised its rate again by 0.75%, which is still a significant increase, Jerome Powell’s statement accompanying the decision was more nuanced than in previous meetings.
He added that “it may be appropriate at some point to reduce inflation” and that we are seeing a slowdown in economic activity, pointing out that recent inflation has been high and fast. it is not fully visible”. Jerome Powell added that the path to a soft landing (soft landing) the US economy was “very low”.
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These words lowered US rates and especially the 10-year yield, which had been under pressure for several weeks due to the slowdown in the economy. And this softening of prices has benefited American indices and especially technology stocks.
Although some “guidelines” have confirmed the market, it seems that caution is still needed for the modern American steel. At the moment of publication, SP500 companies show a 6% profit increase in the second quarter compared to 2021, which is the weakest increase since the fourth quarter of 2020…
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The Nasdaq 100 also met an important resistance level at 12,900: this is the former support level in March that allowed the index to recover before being pushed to the bottom in May. The index’s retracement failed at this level in early June, so this is the second time the index has attempted to break this level (which is also the 38.2% Fibonacci retracement of the post-Covid rally).
A new failure at this level and a return to the 12,500-12,600 zone would indicate a new weakness in the Nasdaq 100 and the risk of returning to the lower Fibonacci retracement (50%), at 11,700 points.
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