One other robust session for |US equities on Thursday with the tech sector main the way in which as soon as once more. The tech-heavy Nasdaq 100 closed the session 2% greater, taking the good points thus far this week to over 4%. The S&P 500 was slower to react to the robust momentum this week however has managed two consecutive each day good points of 1% on Wednesday and Thursday.
The Nasdaq 100 broke above a 9-month excessive on Thursday and is now hovering across the ranges final seen in April final yr. The tech sector’s efficiency has constructed up the good points in order that the index is now 30% above the bottom ranges of the yr thus far, seen within the first week of January. The chart reveals continued bullish momentum with the shifting averages neatly stacked beneath the worth and the each day candlesticks have painted a pleasant sample of upper highs and lows this week.
Nasdaq 100 each day chart
In the meantime, the S&P 500, which contained the losses higher all through the latter a part of 2022, has had much less vary of motion within the restoration thus far this yr, which has confined the worth motion to a good vary over the previous 6 weeks. However this week’s rally has damaged away from the vary, attaining a 9-month excessive and searching for additional traction above the 4,200 mark.
S&P 500 each day chart
Up till Thursday, it appeared that the market was dominated by a number of, principally the massive names within the tech sector. That is doubtless due to the defensive properties these shares have in holding worth throughout turbulent occasions, which implies that traders are rising involved in regards to the outlook. This may recommend the rally within the S&P 500 might not maintain for lengthy as development shares begin to really feel the stress from portfolio realignments.
The decision on whether or not the Fed will pause charges as of subsequent month isn’t but clear. There was a variety of Fed audio system this week and while some consider it’s time to pause and permit the previous charge hikes to take impact, some are nonetheless but undecided on whether or not there may be sufficient reasoning to cease the present climbing cycle given the degrees of inflation and unemployment. Trying on the market-implied charge curve, the chance of no hike in June has gone down from 92% final week to 65% after the feedback from Fed audio system, suggesting traders are rising uncertain in regards to the charge hike pause. They’re additionally beginning to doubt that the Fed will lower charges this yr, one thing it has adamantly denied, with now simply 45bps of easing by December, down from nearly 100bps after the Fed assembly earlier this month.
US charge expectations
Within the FX house, the US greenback continues to make headway with the US greenback index now at a 10-week excessive, breaking above its 50-day SMA (101.88) and 100-day SMA (102.48). EUR/USD and USD/JPY are essentially the most closely impacted by the restoration in USD, with the latter having damaged above its 5-month ascending triangle sample.
EUR/USD, a heavyweight throughout the greenback index, is down 3% within the final two weeks and the pair is struggling to search out help from patrons regardless of the pause within the pullback in immediately’s session. At this level, the rebound within the greenback appears barely extra technical than elementary regardless of the slight flight to security out there.
USD/JPY each day chart
Almost about Gold (XAU/USD), sellers are additionally dominating the house this week as the valuable steel drops beneath $1,960 for the primary time since April 3rd. The transfer decrease has now cleared the 20-day SMA ($2,003) and 50-day SMA ($1,987) which means that the transfer decrease should have some additional room to go within the quick time period. That mentioned, there’s a massive demand for wealth preservation at current so these pullbacks must be seen as a manner for brand new patrons to come back in, and regardless of there nonetheless being room for additional pullbacks, the longer-term outlook stays optimistic.
XAU/USD each day chart
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