USA100 – The Magnificent Seven Pushes the NASDAQ Lower!
The USA100 ended the year on a high rising by 52%, but 2024 has started with the strongest decline since October. As markets opened for the first time in 2024 the USA100 declined by 1.68% and trades lower after market close. The decline was largely triggered by the poor performance of the stocks holding the highest weight, notably Apple stocks.
Apple stocks, which are the most influential asset for the USA100, fell 3.58% in yesterday’s session and are already 0.38% lower this morning. The decline is due to reports that the latest Apple iPhone has underperformed, and revenue is lower than the previous model. Previously the company has relied on customer loyalty and customers wishing to have the latest model even if the current model is not faulty. However, this seems to be a dying trend which is worrying for shareholders. Barclays has also slightly lowered their target price for the stock to $160. This means the asset is trading above the bank’s predicted true value. Barclays also confirmed they are seeing a weakness in the recovery in Mac and iPad sales.
Of the USA100’s top 20 most influential stocks, 18 declined (90%) and AMD saw the strongest pullback, falling almost 6%. The performance during this morning’s Asian session is also similar. According to Bloomberg, analysts believe the stock market will continue to perform well in 2024, but may decline in the short term as we approach earnings season.
If the asset is to decline and form a retracement, wave analysis points towards a further 2% decline. On a medium-term basis, most indicators are also pointing towards a decline, including the RSI and moving averages forming trend lines. Potential targets can be found at $16,424.93, $16,380.60 and $16,191.15. However, if the price rises above $16,577.68 and $16737 respectively, technical analysis is likely to change.
The price throughout the day will largely be influenced by three economic releases; ISM Manufacturing PMI and JOLTS Job Openings at 15:00 GMT, and the Fed’s Meeting Minutes at 19:00 GMT. The Fed’s Meeting Minutes will be particularly vital as it is likely to contain more information on discussions regarding rate cuts.
USDJPY – Dollar Rises but Can Its Momentum Hold Against the Yen?
The US Dollar is again increasing in value against all competitors including against the Japanese Yen. However, the best performing currency after the Dollar is the Japanese Yen which is increasing in value against all currencies bar the Dollar and mixed price action against the Swiss Franc. Therefore, the USDJPY potentially may be ideal for individuals looking for possible swings in both directions.
The US ISM Purchasing Managers’ Index and Job Opening data are expected to be slightly better than the previous month. However, for the Dollar to see significant volatility and momentum, the two will need to read higher than expectations. Dollar buyers will also be hoping that the Fed’s Meeting Minutes confirm the unlikelihood of interest rate cuts in the first quarter of the year.
Click here to access our Economic Calendar
Michalis Efthymiou
Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.