NASDAQ 100 OUTLOOK:
- Nasdaq 100 positive factors as Tesla jumps greater than 13% following robust automobile deliveries for 2021
- Traders shrug off the rise in COVID-19 infections and wager circumstances will begin to subside quickly, following the identical sample seen in different nations
- ISM information, the FOMC minutes, and the NFP report will take heart stage this week
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 many 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 robust positive factors in Tesla shares, which soared 13.55% after fourth-quarter automobile manufacturing and supply outcomes simply topped Wall Street‘s expectations. Apple, which climbed greater than 2% and briefly grew to become the primary firm to hit a $Three trillion capitalization, additionally boosted sentiment, growing urge for food for positions in large tech names.
Though the seven-day rolling common of coronavirus circumstances reached a pandemic report of 403,385 on Sunday, the rise in an infection counts didn’t seem to unnerve traders, as fashions recommend that the present wave pushed by the omicron variant could peak in mid-January and recede aggressively shortly thereafter, as has occurred in different nations comparable to 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 carried out, American Airways (AAL) closed4.3% greater whereas Carnival Company (CCL) added roughly 6.4%. If the well being disaster had been to resolve shortly in 2022, depressed shares with engaging valuations within the reopening basketmightproceed to rally inthe primary quarter.
Cyclicals additionally carried out nicely on Monday, with energy, client discretionary, and financials main the way in which. Banks comparable to JPMorgan (JPM), Wells Fargo (WFC), and Citigroup (C) appeared to profit 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 change into extra profitable, a superb omen for margins and earnings.
As extra merchants return to their desks from trip within the coming days, the consideration will flip to financial information and, in fact, the Federal Reserve’s monetary policy. That mentioned, the calendar is filled with excessive impression 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 reviews rigorously, as they might supply 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 report excessive close to 16,765, earlier than focusing 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 surroundings is a headwind for tech-oriented shares.
However, if promoting stress begins to construct and the Nasdaq 100 pivots decrease, assist is seen at 16,285. If the bears push the worth under this ground, we might see a transfer in direction of 15,925 in early January.
NASDAQ 100 TECHNICAL CHART
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—Written by Diego Colman, Contributor