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Trends & Analysis
News
Mastercard’s shares decline despite upbeat results
News
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News
Is there a golden opportunity with Shopify?
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How should you play the NASDAQ 100’s moment of truth?
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Baker Hughes shares decline amid weak Q4 print

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Asset Watch

Will the FOMC make or break the NASDAQ 100?

 

Thursday, December 15, 2022

The U.S. Consumer Price Index (CPI) came in at 7.1% year-over-year (YoY) versus 7.3% YoY expected on Dec. 13, meaning the relative weakness kept the good times rolling on Wall Street. With inflation progress required for a less hawkish Fed, the results create hope that fewer rate hikes could be on the horizon.
The Bloomberg Economics team wrote: “the string of soft reports should embolden the growing contingent inside and outside the Fed calling for a pause in rate hikes soon.”
However, the FOMC will convene on Dec. 14 and Chairman Jerome Powell is poised to speak his mind, so the loosening of financial conditions could elicit some hawkish pushback.

As interest rates and the U.S. dollar fall while stock prices rise, the developments help spur inflation and undo some of the Fed’s recent progress. Therefore, if Powell plans to throw cold water on the recent rally, it should happen in the next few hours.

While the NASDAQ 100 rose on Dec. 13, an intraday reversal occurred when the index touched its declining resistance line. The NASDAQ 100 closed the session below its 100-day moving average (the blue line), and the key level ended the rally attempts in mid-November and early December. Likewise, the 100-day MA also served as resistance in late March and early April.

Even though a major move may occur on Dec. 14, is it wise to wait until the technical picture is more optimistic?


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