Nasdaq 100 passed a bearish week, closing at 0.98% down on the weekly chart. The upbeat result from Nonfarm payroll pushed pressure on the stock market, but more clues might come after this week's earnings reports.
Federal Reserve On The Rate Decision
Jerome Powell, chairman of the Federal Reserve, stated that although policymakers agree regarding the possibility of a rate cut in 2024, they are awaiting additional evidence of inflation abatement. Throughout the last week, several additional Fed officials shared this view. As a response to inflationary pressures since March 2022, the Federal Open Market Committee (FOMC) maintained its benchmark lending rate for the fifth consecutive time. It projected three reductions for the remainder of the year.
The CME FedWatch Tool indicates that market expectations indicate the committee is likely to maintain its target rate within the range of 5.25% to 5.5% during its forthcoming meeting on April 30 and May 1. In employment, nonfarm payrolls surpassed market expectations by 303,000 last month, while the unemployment rate of 3.8% was in line with projections.
PMI Suggests A Stronger Economy
In March, the Institute for Supply Management reported that manufacturing activity in the United States increased, although the services sector expanded sluggishly. The healthcare sector experienced a substantial decrease of 3.1% in performance, primarily due to substantial reductions in Humana, CVS Health, and UnitedHealth Group shares after the government declared a 3.7% increase in payments for Medicare Advantage plans.
Anticipated economic developments for the upcoming week include noteworthy updates on March's producer and consumer inflation and an initial consumer sentiment assessment for the same month. Furthermore, the minutes of the FOMC's March meeting are anticipated to be disclosed on Wednesday.
Earnings Reports To Look At
No significant releases are expected this week until Friday, as major banks will disclose their quarterly reports on that day.
Before that, WD-40 Company could show an EPS of $1.13 on Tuesday, before Delta Air Lines, Inc on Wednesday. However, Friday would be a crucial day as JP Morgan Chase & Co, Citigroup Inc., BlackRock, Inc., Wells Fargo & Company, and Wells Fargo & Company will disclose their quarterly reports.
Nasdaq 100 Technical Analysis
In the NASDAQ 100 index daily chart, the recent price shows a bullish continuation as the dynamic 20-day Exponential Moving Average works as a confluence support to the 17764.60 static line. Moreover, the recent price trades sideways within a rectangle pattern backed by a broader bullish trend. Therefore, trend continuation needs a solid breakout from the rectangle pattern before aiming for the 19200.00 resistance level.
Investors should closely monitor how the price reacts on the 50-day Exponential Moving Average level, where a bullish rejection could be an early long opportunity. Also the upcoming earnings report releases are crucial factors to garage NASDAQ 100 feature price movement.
Investors should closely monitor how banking stocks perform after this week's earnings reports, as these are directly connected to the upcoming rate decision by the Federal Reserve. On the bearish side, immediate selling pressure and the daily candle below the 17000.00 psychological line could be a high-probability short opportunity targeting the 14000.00 line.
