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Tech Stocks Soaring
The Nasdaq was seen breaking out to fresh highs on the year yesterday as risk appetite ratcheted higher in response to increased optimism over the US debt ceiling negotiations. Both Biden and McCarthy voiced their optimism yesterday that a deal can be done in time to avoid an historic US debt default on June 1st. For McCarthy in particular, this optimism marks a shift from post-meeting comments on Tuesday citing the wide gap which still remained between the two sides. Biden, who is in Japan for G7 meetings this week, will cut his trip short in order to get back and continue negotiations, while staff-level negotiations have also been approved.
Shifting Fed View
Uncertainty ahead of the looming debt ceiling deadline has been a major supporting factor for USD recently which has been having a depressing impact on stocks. The Nasdaq, however, has remained strong throughout this recent period. The prevailing view is that with the Fed on the verge of pausing its tightening campaign, USD is likely to break lower soon and tech stocks stand to benefit the most. While this narrative holds, the Nasdaq looks poised for further gains near-term.
Technical Views
Nasdaq
The rally in the Nasdaq has seen the index breaking out above the 13237.4 level, supported by bullish momentum studies readings. While this area holds below as support, the next challenge for bulls is the 13752.6 level with a break of this are opening the way for a run up to 14288.2 thereafter.
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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.