Stocks Rallying on US Data
The Nasdaq is pushing firmly higher through the back of the week as the market continues to recover from a drop lower at the start of the week. A hawkish shift in Fed outlook, tied to last week’s bumper US jobs report, saw stocks coming under heavy selling pressure at the weekly open. However, selling was quickly reversed and some softer data through the week has helped curtail the USD rally, allowing stocks room to push higher.
Mixed Inflation Figures
Weaker PPI figures and some softness in monthly CPI data have fuelled a small rise in front-end Fed rate-cut pricing. While a cut still isn’t seen until June, the shift this week shows that Dollar remains highly vulnerable to two-way risk, meaning that stocks could still easily break higher on any fresh data weakness and subsequent lift in rate-cut expectations.
US Data & Trump
Looking ahead today, traders will be watching US retail sales. For stock bulls, the ideal scenario would be softer-than-forecast data today, keeping USD pressured lower and stocks supported. Into next week, the risk of greater volatility is seen as Trump takes office. There is great deal of speculation over how the incoming president will act in his first week back at the White House and stocks could see some downside if Trump’s anticipated tariff measures lead traders to perceive heightened inflation risks.
Technical Views
Nasdaq
The rally off the 20,668 level is gathering pace now with price fast approaching a test of the bear channel highs. If bulls can break above, focus will be firmly placed on a return to December highs and a fresh retest of the broken bull trend line. The bull view only changes on a break below 20,668.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.