NAS100 Constrained as the Fed & the Magnificent Seven Take Center Stage
NAS100 Analysis
The tech-heavy index has been on an incredible run this year, helped by the Artificial Intelligence (AI) boom and a less aggressive stance by the Fed, with both those themes taking center stage this week. The US central bank had stayed on the sidelines last month, but is widely expected to raise rates on Wednesday, when it concludes its two-day meeting.
With a 25 bps hike considered a done-deal by markets, focus shifts on what's next, but the outlook is highly uncertain. The last CPI report showed a significant deceleration in inflation pressures and markets anticipate Wednesday's hike to be the final one, while seeing rate cuts early next year. The Fed may have done enough, but the tight labor market supports a sustained restrictive stance and policymakers may be cagey around the next steps.
Tesla Motors Inc kicked things off for "Magnificent Seven" last week, but markets reacted negatively to the new profitability slump and the vague outlook around upcoming models. Now focus shifts to three more members of that group.
Another round in the AI battle between Microsoft and Alphabet is due on Tuesday, as the two tech behemoths release their earnings on Tuesday. Meta Platforms follows on Wednesday. The Facebook-parent gets its mojo back this year, with renewed focus on AI, cost-cutting measures and the launch of a Twitter-rival app.
The outcome of the Fed and the quarterly results of the aforementioned tech giants will likely determine the trajectory of NAS100, which trades with caution, following a losing week. This makes it vulnerable to the EMA200 (at around 15,090), although deeper fall would need strong catalyst and would find a series of support areas, starting with a thick daily Ichimoku Cloud. Above the EMA200 NAS100 is on the driver's seat and has the ability to tackle 16,000, although the record highs (16,770) have a higher degree of difficulty.
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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