NAS100 Cautious as Mega Cap Earnings & the Fed Loom
NAS100 Analysis
The tech heavy-index slides this month, as shifting expectations around the Fed contain the AI-fueled rally. Policymakers have turned cautious towards removing monetary restraint because of resilient labor market, strong economy and persistent inflation, underscored by Friday's hot PCE report. Markets have pushed back the timing and extent of rate cuts, with CME's Fed Watch Tool currently assigning the highest probability to just one 25 bps cut this year [1]. Fed officials announce the latest policy decision on Wednesday and although no rate change is projected, investors will be eagerly anticipating any update around their intentions.
Mega cap earnings are also in the spotlight, as Amazon.com and Apple report their latest results, with the first coming from a series of impressive quarters and the latter facing multiple headwinds. Amazon expects sales to increase 8-13% y/y in the quarter reported on Tuesday [2], despite the pullback from the Q4 record number. The critical cloud business (AWS) will be closely watched after returning to growth and the advertising segment, amidst a broader market improvement. [2]
Apple on the other hand is in a weak position ahead of Thursday's results and could slip back to revenue contraction. It is facing weakening demand in China, regulatory challenges to its business model and appears to lag in the AI arena, as rivals like have already launched AI powered smartphones. These headwinds have weighed on the stock, which is close to bear territory despite its bounce over the past few days.
NAS100 is subdued today, as markets await these key events that can determine its trajectory. The tech-heavy index has pulled back from the March record peak and below the EMA200 there is risk for renewed pressure to the 38.2% Fibonacci. On the other hand, NAS100 defended this critical level and tries to take out the EMA200. Successful effort will open the door towards new all-time highs (18,495).
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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