Market Analysis – NASDAQ
The Nasdaq, one of the leading US indices, is correcting upwards after two days of decline. The asset is currently trading at $4,207 which is a slight increase after the commemoration of Memorial Day in the United States, where all markets in the US were closed. The price of the asset has already fully corrected since the decline on the 10th May, where the asset dropped by 4.72% over a period of four trading days. The correction has been less stable and has taken 14 trading sessions; for this reason, the market is evaluating and positioning their trades as the price again reaches the previous collapsing point.
The growth of the instrument is still restrained by the weakness of the US Dollar Currency Index, which again dropped below the psychological level of 90 points and is currently trading at 89.70. The US Dollar was under pressure by the speech of US President, Joe Biden, during which he presented a draft budget for 2022, which involves an increase in spending from $1.52T to $6T. The difference is supposed to be compensated for by income from an increase in income tax for successful companies and individuals from 21% to 28%, with which the bulk of large US businesses still disagrees as they believe it will harm both employment and economic activity in the long-run.
The market is still paying close attention to the high level of inflation, fearing this can affect both the economy and the condition of the stock market. Investors wait for the June meeting of the US Federal Reserve, believing that regulator officials will respond to this economic challenge, though this is not yet known. In the past, the Central Regulator has declined to comment positively on altering the monetary policy. The Organization for Economic Cooperation and Development increased its forecast for global economic growth for this year from 5.6% to 5.8%. In addition to inflation and the monetary policy, the market is also looking closely at the situation on the bond market which is still not clear. The bond market this year has previously proven to be partially correlated with both the stock market and the US Dollar. The 10-year yield fell back to 1.580% after a brief rally.
The stock with one of the highest increases is Facebook, which has increased by over 5% in one sole week. However, even with the significant increase, fundamentals have been slightly negative. Yesterday, the Financial Times published an article stating that the European Commission suspects the corporation of violating antitrust laws. According to the article, the investigation concerns the field of online sales. The EU is looking to find out if the Free Marketplace policy is an obstacle to competitors. Currently, Facebook Inc. is the only one of the TOP-6 American technology companies, in respect of which the EU has not yet conducted audits. As for the rest, the company is increasing its turnover and improving its services and financial performance. According to a recent report for the first quarter of 2021, the number of daily active users grew by 8%. The number of monthly active users increased by 10%. The number of the company’s personnel increased to 60,654 people, which is 26% more than the data for the previous year.
Among the growth leaders are Nvidia Corp. (+4.88%), Pinduoduo Inc. (+4.36%), Xilinx Inc. (+3.24%), and Moderna Inc. (+3.05%).
Among the leaders of the decline are Dollar Tree (–2.61%), Costco Wholesale Corp. (–2.38%), and Peloton Interactive Inc. (–2.03%)
Resistance levels: 13757.0, 14053.0.
Support levels: 13620.0, 13360.0.