{"id":64824,"date":"2023-06-21T15:00:19","date_gmt":"2023-06-21T12:00:19","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=64824"},"modified":"2024-08-26T11:43:29","modified_gmt":"2024-08-26T08:43:29","slug":"equities-report-equity-bulls-take-a-break","status":"publish","type":"post","link":"https:\/\/www.ironfx-id.com\/id\/equities-report-equity-bulls-take-a-break\/","title":{"rendered":"Equities report: Equity bulls take a break"},"content":{"rendered":"<p><strong>US<\/strong> <strong>stock<\/strong> <strong>markets<\/strong> tended to remain <strong>relatively<\/strong> <strong>unchanged<\/strong> in the past few days, maybe even edged a bit <strong>lower<\/strong>. We saw that the <strong>Fed\u2019s<\/strong> <strong>hawkish<\/strong> <strong>stance,<\/strong> despite <strong>skipping<\/strong> a <strong>rate<\/strong> <strong>hike<\/strong> in the past <strong>meeting<\/strong> had <strong>little<\/strong> <strong>effect<\/strong> on <strong>US<\/strong> <strong>stockmarkets<\/strong>. In this report, we aim to present the recent <strong>fundamental<\/strong> dan <strong>economic<\/strong> <strong>news<\/strong> <strong>releases<\/strong> that impacted the <strong>US<\/strong> <strong>stock<\/strong> <strong>markets<\/strong>, look ahead at the <strong>upcoming<\/strong> <strong>peristiwa<\/strong> that could affect their <strong>performance<\/strong> and conclude with a <strong>teknikal<\/strong> <strong>analysis<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-fed-s-interest-rate-decision-to-remain-on-hold\"><strong><u>Fed\u2019s interest rate decision to remain on hold<\/u><\/strong><\/h2>\n\n\n\n<p>The <strong>Fed<\/strong> last <strong>Wednesday<\/strong> decided to remain <strong>on hold<\/strong> as was widely <strong>anticipated<\/strong>. Furthermore, <strong>Fed<\/strong> <strong>Chair<\/strong> <strong>Powell<\/strong> reiterated on numerous <strong>occasions<\/strong> that despite remaining <strong>on hold<\/strong>, this does not mean that the <strong>Fed<\/strong> is <strong>done<\/strong> with <strong>hiking interest rates<\/strong>, thus leaving the <strong>door open<\/strong> for <strong>future<\/strong> <strong>rate hikes<\/strong>. Characteristically he also stated that <strong>rate cuts<\/strong> are \u201ca few years out\u201d which contradicted <strong>market expectations<\/strong> for the bank to <strong>proceed<\/strong> with <strong>rate cuts<\/strong> by the <strong>end<\/strong> of the <strong>year<\/strong>. Interestingly, the <strong>Dot plot<\/strong> moved <strong>higher<\/strong> <strong>released<\/strong> after the <strong>FOMC<\/strong> <strong>interest<\/strong> <strong>rate<\/strong> <strong>decision<\/strong>, with <strong>Fed policymakers<\/strong> now <strong>anticipating<\/strong> the <strong>Fed\u2019s<\/strong> <strong>terminal rate<\/strong> to be <strong>higher<\/strong> than what was <strong>previously<\/strong> <strong>anticipated<\/strong> with the <strong>median rate<\/strong> by the <strong>end<\/strong> of the <strong>year<\/strong> now being <strong>5.6%<\/strong>, which would imply that the <strong>bank<\/strong> has still to <strong>deliver<\/strong> two more <strong>rate<\/strong> <strong>hikes<\/strong> before year\u2019s end and before <strong>pausing<\/strong> its <strong>rate<\/strong> <strong>hiking<\/strong> <strong>path<\/strong>. We would also like to <strong>highlight<\/strong> that in the <strong>banks\u2019<\/strong> <strong>projections<\/strong>, the possibility of a <strong>recession<\/strong> in the <strong>US<\/strong> <strong>economy<\/strong> seems to have been <strong>reduced<\/strong>, which in turn <strong>may<\/strong> provide some <strong>support<\/strong> for <strong>US stock markets<\/strong>. Overall though and for the time being we expect the <strong>bank<\/strong> to <strong>continue<\/strong> to <strong>lean<\/strong> on the <strong>hawkish<\/strong> <strong>side<\/strong> a <strong>scenario<\/strong> that could <strong>weigh<\/strong> on <strong>US equities markets<\/strong>. We would like to <strong>highlight<\/strong> as the <strong>next<\/strong> <strong>big<\/strong> <strong>test<\/strong> for <strong>US stock markets<\/strong> the <strong>testimony<\/strong> of <strong>Fed Chairman Powell<\/strong> before <strong>Congress<\/strong> and should he sound <strong>hawkish<\/strong> enough, we may see <strong>US<\/strong> <strong>stock markets<\/strong> <strong>retreating<\/strong> and vice versa.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-china-s-rebound-stalls\"><strong><u>China\u2019s rebound stalls<\/u><\/strong><\/h2>\n\n\n\n<p>Sticking to <strong>equities<\/strong> <strong>fundamentals<\/strong> we note the <strong>market<\/strong> <strong>worries<\/strong> for the <strong>recovery<\/strong> of the <strong>Tiongkok<\/strong> <strong>economy<\/strong>. On a <strong>macroeconomic<\/strong> <strong>level<\/strong>, it should be noted that <strong>China\u2019s<\/strong> <strong>trade<\/strong> <strong>surplus<\/strong> <strong>narrowed<\/strong> to <strong>one-year lows<\/strong>, an <strong>indication<\/strong> of <strong>fewer<\/strong> <strong>international<\/strong> <strong>trading<\/strong> <strong>transactions<\/strong> and thus <strong>lesser<\/strong> <strong>wealth<\/strong> entering the <strong>Tiongkok<\/strong> <strong>economy<\/strong>. Yet that could be a <strong>consequence<\/strong> of the <strong>contraction<\/strong> of <strong>economic<\/strong> <strong>activity<\/strong> suffered by <strong>China\u2019s<\/strong> <strong>crucial<\/strong> <strong>manufacturing<\/strong> <strong>sector<\/strong>. It\u2019s characteristic that the <strong>Urban<\/strong> <strong>investment<\/strong>, <strong>industrial production<\/strong> dan <strong>retail sales<\/strong> growth rates, all <strong>slowed dow<\/strong>n for May <strong>underscoring<\/strong> the <strong>difficulties<\/strong> faced by the <strong>Chinese economy<\/strong> on its <strong>road<\/strong> to <strong>recovery<\/strong>. For the time being, we note that the <strong>Central Bank of the People&#8217;s Republic of China<\/strong> <strong>cut<\/strong> <strong>lending<\/strong> <strong>rates<\/strong> in an <strong>effort<\/strong> to <strong>boost<\/strong> <strong>activity<\/strong> in the <strong>Chinese economy<\/strong>, yet the <strong>cuts<\/strong> <strong>delivered<\/strong> may not be <strong>sufficient<\/strong> to <strong>revive<\/strong> <strong>it<\/strong>. Overall should the <strong>difficulties<\/strong> for the <strong>Tiongkok<\/strong> <strong>economy<\/strong> to <strong>recover<\/strong> be <strong>extended<\/strong> we may see the <strong>market<\/strong> <strong>sentiment<\/strong> turning <strong>risk averse<\/strong>, as the <strong>optimism<\/strong> could be <strong>reduced<\/strong> with <strong>negative<\/strong> <strong>consequences<\/strong> for <strong>US stock markets<\/strong>. On a <strong>deeper level<\/strong>, we also note the <strong>conflicting<\/strong> <strong>messages<\/strong> sent on a <strong>political level<\/strong>. Despite the <strong>initial<\/strong> <strong>positive signals<\/strong> coming from US <strong>Foreign<\/strong> <strong>Secretary<\/strong> <strong>Blinken\u2019s<\/strong> <strong>visit<\/strong> to <strong>China<\/strong> that <strong>tensions<\/strong> between the two countries may start <strong>thawing<\/strong> or at least may not <strong>escalate further<\/strong>, <strong>US<\/strong> President <strong>Biden<\/strong> calling <strong>China\u2019s<\/strong> leader <strong>Xi<\/strong> as a \u201c<strong>dictator<\/strong>\u201d is not expected to <strong>go<\/strong> <strong>down well<\/strong> with the <strong>Tiongkok<\/strong>. Further <strong>escalations<\/strong> of <strong>tensions<\/strong> in the <strong>US-Sino<\/strong> <strong>relationships<\/strong> may <strong>intensify<\/strong> <strong>market worries<\/strong>.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-technical-analysis\"><strong><u>Analisis Teknikal<\/u><\/strong><\/h2>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-us100-nasdaq-daily-chart\"><strong>US100 (Nasdaq) Daily Chart<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-full\"><img fetchpriority=\"high\" decoding=\"async\" width=\"975\" height=\"456\" src=\"\/wp-content\/uploads\/2023\/06\/image-97.png\" alt=\"\" class=\"wp-image-64826\"\/><\/figure>\n\n\n\n<p>Support: 14650 (S1), 13920 (S2), 13300 (S3)<\/p>\n\n\n\n<p>Resistance: 15300 (R1), 16000 (R2), 16750 (R3)<\/p>\n\n\n\n<p><strong>Nasdaq\u2019s<\/strong> <strong>rise<\/strong> over the past <strong>month<\/strong> seems to have hit a <strong>ceiling<\/strong> on the 15300 (R1) <strong>resistance<\/strong> <strong>line<\/strong> dan <strong>corrected<\/strong> a bit <strong>lower<\/strong>. For the time being we view the <strong>consolidation<\/strong> of the <strong>index\u2019s<\/strong> <strong>price action<\/strong> as a mere <strong>correction<\/strong> for now, given that the <strong>upward<\/strong> <strong>trendline<\/strong> guiding the <strong>index<\/strong> remains <strong>intact<\/strong>. Furthermore please note that the <strong>RSI<\/strong> <strong>indicator<\/strong> despite correcting a bit <strong>lower<\/strong> is still above the <strong>reading<\/strong> of <strong>70<\/strong> <strong>underscoring<\/strong> the <strong>bullish<\/strong> <strong>sentiment<\/strong> of the <strong>market<\/strong>, yet may also imply that the <strong>index<\/strong> is currently at <strong>overbought<\/strong> levels and needs to <strong>correct<\/strong> even <strong>lower<\/strong>. Please note that the <strong>consolidation<\/strong> lower of <strong>Nasdaq\u2019s<\/strong> <strong>price action<\/strong> began after it hit on the <strong>upper<\/strong> <strong>Bollinger band<\/strong>, which allowed for some <strong>room<\/strong> to be <strong>created<\/strong> between the <strong>price action<\/strong> and the <strong>upper<\/strong> <strong>Bollinger band<\/strong>, hence the <strong>bulls<\/strong> may have space to <strong>cover<\/strong>. Should the <strong>bulls<\/strong> maintain <strong>control<\/strong> over the <strong>index\u2019s<\/strong> <strong>direction<\/strong>, we may see <strong>Nasdaq<\/strong> breaking the 15300 (R1) <strong>resistance<\/strong> <strong>line<\/strong> and aim for the 16000 (R2) <strong>resistance<\/strong> <strong>barrier<\/strong>. On the flip side for a <strong>bearish<\/strong> <strong>outlook<\/strong> the <strong>current<\/strong> <strong>correction<\/strong> <strong>lower<\/strong> is not enough. To <strong>call<\/strong> in the <strong>bears<\/strong>, we would <strong>require<\/strong> <strong>Nasdaq<\/strong> to <strong>drop<\/strong> <strong>below<\/strong> the <strong>prementioned<\/strong> <strong>upward<\/strong> <strong>trendline<\/strong>, in a first <strong>sign<\/strong> that the <strong>upward<\/strong> <strong>movement<\/strong> has been <strong>interrupted<\/strong>, break the 14650 (S1) <strong>support<\/strong> <strong>line<\/strong> <strong>clearly<\/strong> and start aiming for the 13920 (S2) <strong>support<\/strong> <strong>level<\/strong>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"translation-block\">If you have any general queries or comments relating to this article please send an email directly to our Research team at <a href=\"mailto:research_team@ironfx.com\" target=\"_self\">research_team@ironfx.com<\/a><\/p>\n\n\n\n<p>Disclaimer:<br>This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.<\/p>","protected":false},"excerpt":{"rendered":"<p>US stock markets tended to remain relatively unchanged in the past few days, maybe even edged a bit lower. We<\/p>","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-64824","post","type-post","status-publish","format-standard","hentry","category-uncategorized","blog-category-financial-news","entry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Equities report: Equity bulls take a break<\/title>\n<meta name=\"description\" content=\"US stocks remain flat or slightly lower as Fed\u2019s hawkish stance shows minimal impact. 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