NASDAQ 100 OUTLOOK:
- Nasdaq 100 beneficial properties as Tesla jumps greater than 13% following sturdy automotive deliveries for 2021
- Traders shrug off the rise in COVID-19 infections and guess circumstances will begin to subside quickly, following the identical sample seen in different international locations
- ISM knowledge, the FOMC minutes, and the NFP report will take middle stage this week
Most learn: Greenback’s Hawkish Path Is Not Essentially a Bullish One
After a blockbuster 2021, U.S. shares began the brand new 12 months on the entrance foot, regardless of a steep rise in COVID-19 circumstances in a lot of the 50 states. On the market shut, the S&P 500 gained 0.64%, ending the session at 4,796, a whisker away from its all-time excessive of 4,808. In the meantime, the Nasdaq 100 jumped1.11% to 16,502, boosted by sturdy beneficial properties in Tesla shares, which soared 13.55% after fourth-quarter car manufacturing and supply outcomes simply topped Wall Avenue’s expectations. Apple, which climbed greater than 2% and briefly turned the primary firm to hit a $3 trillion capitalization, additionally boosted sentiment, rising urge for food for positions in huge tech names.
Though the seven-day rolling common of coronavirus circumstances reached a pandemic document of 403,385 on Sunday, the rise in an infection counts didn’t seem to unnerve buyers, as fashions counsel that the present wave pushed by the omicron variant could peak in mid-January and recede aggressively shortly thereafter, as has occurred in different international locations reminiscent of South Africa.
Because of this, reopening shares kicked off 2022 on a excessive be aware, with airways and cruise operators surging throughout the board. When it was all mentioned and performed, American Airways (AAL) closed4.3% larger whereas Carnival Company (CCL) added roughly 6.4%. If the well being disaster have been to resolve shortly in 2022, depressed shares with engaging valuations within the reopening basketmightproceed to rally inthe primary quarter.
Cyclicals additionally carried out properly on Monday, with energy, client discretionary, and financials main the best way. Banks reminiscent of JPMorgan (JPM), Wells Fargo (WFC), and Citigroup (C) appeared to learn from the giant upside transfer in Treasury charges, which pushed the 10-year yield as much as 1.64%, its highest stage since November 25. Basically, when yields rise, loans provided by lending establishments develop into extra profitable, an excellent omen for margins and earnings.
As extra merchants return to their desks from trip within the coming days, the consideration will flip to financial knowledge and, in fact, the Federal Reserve’s financial coverage. That mentioned, the calendar is full of excessive affect releases this week, with ISM Manufacturing (Dec), the FOMC Minutes, ISM Companies (Dec), and Non-farm payrolls (Dec) being the highlights. Merchants ought to watch these studies fastidiously, as they could provide clues concerning the well being of the financial system and the energy of the restoration.
Specializing in technical evaluation, the Nasdaq 100 has bounced off assist and seems headed for its December excessive at 16,607. If the index manages to interrupt by this barrier, it could possibly be on observe to retest its document excessive close to 16,765, earlier than concentrating on 17,200, the higher boundary of an ascending channel in play for the previous 11 months. In any case, warning is warranted at this level, because the rising yield atmosphere is a headwind for tech-oriented shares.
Then again, if promoting stress begins to construct and the Nasdaq 100 pivots decrease, assist is seen at 16,285. If the bears push the worth beneath this ground, we might see a transfer in direction of 15,925 in early January.
NASDAQ 100 TECHNICAL CHART
Nasdaq 100 (NDX) chart ready in TradingView
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—Written by Diego Colman, Contributor