Jump to content

Nasdaq 100 Shrugs Off Inflation Concerns, Hang Seng Breaches Key Resistance


Recommended Posts

S&P 500, HANG SENG INDEX, ASX 200 INDEX OUTLOOK:

  • Dow Jones, S&P 500 and Nasdaq 100 closed +0.11%, +0.28%, and +0.38% respectively
  • US inflation hit a four-decade high of 7.0% in December, largely in line with expectations
  • Asia-Pacific markets look set to open higher. Hong Kong stocks may continue to lead the gains
Yes, You Can Invest in a Tech-Less Nasdaq-100 | Nasdaq

Nasdaq 100, Hang Seng Tech, US Inflation, China Inflation, Asia-Pacific at the Open:

Wall Street stocks closed mildly higher on Wednesday, as the closely watched US inflation data didn’t deliver much of a surprise. In the prior day, Federal Reserve Chair Jerome Powell assured market participants that the central bank will tighten policy to contain inflation without hurting the economy. This clear guidance removed policy uncertainties and allowed investors to focus more on the upcoming earnings season.

The DXY US Dollar index plummeted 0.62% overnight, falling to a two-month low of 95.00. This may be attributed to unwinding activities as investors have previously priced-in at least three rate hikes this year. As the roadmap of tightening gets clear, some traders may look for an exit and profit taking opportunities. A soft US Dollar is generally positive to stocks, commodities and Emerging Market assets.

Top 10 Stocks by Market Cap in the Nasdaq 100

Nasdaq 100 Shrugs Off Inflation Concerns, Hang Seng Breaches Key Resistance

Source: Bloomberg, DailyFX

Hong Kong stocks may continue to rise on Thursday, led by the technology sector. Hong Kong’s Hang Seng Index surged 2.8% and the technology benchmark Hang Seng Tech Index soared nearly 4.99% on Wednesday, suggesting that investors may be buying the dips in anticipation of more monetary and stimulus support. The stock connections registered HK$ 5.29 billion of net Southbound inflows on Wednesday, marking the highest level since October 2021. Wealth effect may encourage more buyers to return to the market after months of selling.

Another catalyst on Wednesday was the release of lower-than-expected inflation figures. December’s CPI and PPI came in at 1.5% and 10.3% respectively, falling from November’s readings of 2.3% and 12.9%. This will make it easier for the PBOC to loose monetary policy in 2022 to boost growth as the country fought hard to maintain its zero-Covid policy.

The Japanese government has extended strict border controls until the end of February amid a rapid increase in Covid-19 cases due to the Omicron variant. This has weighed on market sentiment, especially the tourism and travel sectors. The Nikkei 225 index remains in a consolidative mood waiting for fresh catalysts for a breakout.

China Inflation – Dec 2021

Nasdaq 100 Shrugs Off Inflation Concerns, Hang Seng Breaches Key Resistance

Source: Bloomberg, DailyFX

Looking ahead, several Federal Reserve official speeches dominate the economic docket alongside US initial weekly jobless claims. Find out more from theDailyFX economic calendar.

Asia-Pacific markets look set to open broadly higher on Thursday. Futures in mainland China, Australia, Hong Kong, South Korea, Taiwan, Singapore, Malaysia, India and Thailand are in the green, whereas those in Japan are in the red.

Looking back to Wednesday’s close, 10 out of 11 S&P 500 sectors ended higher, with 57.6% of the index’s constituents closing in the green. Materials (+0.95%), consumer discretionary (+0.63%) and information technology (+0.44%) were among the best performers, whereas healthcare (-0.26%) and financials (+0.04%) trailed behind.

S&P 500 Sector Performance 12-01-2022

Nasdaq 100 Shrugs Off Inflation Concerns, Hang Seng Breaches Key Resistance

Source: Bloomberg, DailyFX

Nasdaq 100 Index Technical Analysis

The Nasdaq 100 index rebounded from a key support level of 15,550 – the lower bound of the range-bound zone it traded over the last few months. An immediate resistance level can be found at 16,650 – the 200% Fibonacci extension. The moving average lines are flattening, pointing to a lack of clear direction. The MACD indicator is trending lower, suggesting that downward momentum may be prevailing.

Nasdaq 100Index – Daily Chart

Nasdaq 100 Shrugs Off Inflation Concerns, Hang Seng Breaches Key Resistance

Chart created with TradingView

Hang Seng Index Technical Analysis:

The Hang Seng Index (HSI) was trading within a “Falling Wedge” pattern for the past few months, as highlighted in the chart below. Prices are challenging the upper trendline of the wedge for a breakout. A successful attempt may signal a bullish trend reversal and open the door for further gains.The MACD indicator is trending higher below the neutral midpoint, suggesting that bullish momentum may be building.

Hang Seng Index – Daily Chart

Nasdaq 100 Shrugs Off Inflation Concerns, Hang Seng Breaches Key Resistance

Chart created with TradingView

ASX 200 Index Technical Analysis:

The ASX 200 index pulled back to a range-bound zone between 7,200 to 7,500 after a ‘false breakout’ last week. The floor and ceiling of the range may be viewed as immediate support and resistance levels respectively. A meaningful breach above 7,500 may intensify buying pressure and expose the next resistance level of 7,760.

ASX 200 Index – Daily Chart

Nasdaq 100 Shrugs Off Inflation Concerns, Hang Seng Breaches Key Resistance

Chart created with TradingView

 

Written by Margaret Yang, Strategist for DailyFX.com. 13th Jan 2022.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      20,156
    • Total Posts
      88,290
    • Total Members
      69,134
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    james01
    Joined 07/10/22 14:04
  • Posts

    • Recent commentary from a number of high-profile Federal Reserve members indicates their willingness to keep up the pressure on fighting inflation.   The incoming consumer price inflation (CPI) data on Thursday will be key and may surprise on the upside as has been the case for much of this year. IGTV’s Jeremy Naylor looks at EUR/USD.          
    • Market data to trade the week starting 10 October: US earnings; US CPI For equity traders it’s the start of another period of intense activity as third quarter earnings begin to be released. IG technical analyst, Axel Rudolph FSTA, looks at the chart of JP Morgan (JPM) as an opener. Axel also examines a trade around US inflation and chooses to analyse the S&P 500.          
    • SEPTEMBER JOBS REPORT KEY POINTS: The September jobs report showed that the U.S. economy added 263,000 workers last month versus expectations of a gain of 250,000 payrolls. Meanwhile, the unemployment rate fell to 3.5%, two-tenths of a percent below forecasts Average hourly earnings rose 0.3% on a monthly basis and 5.0% compared to a year ago, matching estimates The resilient labor market is likely to keep the Fed on a hawkish path     MARKET REACTION TO NFP REPORT Immediately following the release of the September jobs report, the U.S. dollar, as measured by the DXY index, spiked higher, bolstered by a solid jump in U.S. Treasury yields. Meanwhile, S&P 500 and Nasdaq 100 futures plunged into negative territory, falling more than 1.5% at the time of writing. Strong labor market data is likely to keep the Fed on the hawkish path, prompting policymakers to deliver additional interest rate hikes and preventing them from pivoting prematurely toward a dovish posture. This scenario should favor the U.S. dollar, but could create strong headwinds for equities.   Oct 7, 2022 | DailyFX Diego Colman, Strategist
×
×
  • Create New...