Nasdaq 100 Pulls Back Ahead of CPI Data, Asia-Pacific to Open Mixed

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DOW JONES, NIKKEI 225, ASX 200 INDEX OUTLOOK:

  • Dow Jones, S&P 500 and Nasdaq 100 indexes closed +0.46%, +0.10% and -0.53% respectively
  • The S&P 500 hit an all-time high after the Senate passed President Joe Biden’s $1.2 trillion infrastructure plan
  • US headline and core CPI figures are in focus today

Nasdaq 100, Infrastructure Stimulus, US Inflation, Asia-Pacific at Open:

Wall Street stocks were mixed on Tuesday, with materials (+2.10%) and energy (+1.83%) sectors outperforming while the information technology (-0.86%) sector lagging behind. The US Senate passed a massive $1.2 trillion infrastructure plan, paving the way for a major victory to the Biden Administration if it wins final approval in the lower chamber of Congress.

The stimulus bill includes a $550 billion fund for transportation infrastructure, high-speed internet and efforts to fight climate change. A successful outcome may provide a long-term boost to the construction, raw materials and the energy sector, albeit it may also translate to higher inflation as demand for raw materials rise. The S&P 500 index climbed to a fresh record against this backdrop.

The Nasdaq 100 index retreated slightly, dragged by NVIDIA, PayPal and Microsoft. Investors are eyeing today’s release of US headline and core inflation data for clues about rising price levels and their ramifications for Fed policy. The core rate is expected to moderate slightly to 4.3% YoY in July from 4.5% in June, which was the highest since 1992. Higher-than-expected data prints may intensify tapering fears and pull equities lower, whereas weaker outcomes may do the reverse.

Top 10 Nasdaq 100 Constituent Performance 10-08-2021

Nasdaq 100 Pulls Back Ahead of CPI Data, Asia-Pacific to Open Mixed

Source: Bloomberg, DailyFX

Asia-Pacific markets are positioned for a mixed start to the day. Futures in Japan, mainland China, Australia, Malaysia, India are in the green, whereas those in Hong Kong, South Korea, Taiwan, Singapore and Thailand are in the red.

Japan’s Nikkei 225 index looks set to extend higher after rising 0.24% on Tuesday. Investors cheered strong corporate earnings, but gains were limited by lingering pandemic concerns as the Delta variant of Covid-19 continued to spread around the world. Japan reported 12,912 new infections on Monday.

Nasdaq 100 Index Technical Analysis

The Nasdaq 100 index breached above a key psychological resistance level at 15,000 and has since opened the door to further upside potential. The next resistance level can be found at 15,300 – the 127.2% Fibonacci extension. A pullback may lead to a test of the 20-Day SMA line for immediate support. The bearish MACD indicator however, suggests that upward momentum may be fading.

Nasdaq 100 Index Daily Chart

Nasdaq 100 Pulls Back Ahead of CPI Data, Asia-Pacific to Open Mixed

Nikkei 225 Index Technical Analysis:

The Nikkei 225 index remains in a “Descending Channel” formed since February. The floor and ceiling of the channel may be viewed as immediate support and resistance levels respectively. The overall trend remains bearish-biased, as suggested by the downward-sloped SMA lines. The MACD indicator formed a bullish crossover beneath the neutral midpoint, suggesting that selling pressure may be fading.

Nikkei 225 Index – Daily Chart

Nasdaq 100 Pulls Back Ahead of CPI Data, Asia-Pacific to Open Mixed

ASX 200 Index Technical Analysis:

The ASX 200 index has breached above a key resistance level at 7,500 – the 200% Fibonacci extension. The overall trend remains bullish-biased, as suggested by the consecutive higher highs and higher lows formed over the past few months. The MACD indicator formed a bullish crossover and trended higher, suggesting that upward momentum is dominating.

ASX 200 Index – Daily Chart

Nasdaq 100 Pulls Back Ahead of CPI Data, Asia-Pacific to Open Mixed

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitte

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