USA100 – Stock Market Unwind from Omicron but also Pressure from the Fed

USA100, Daily

The US stock market bounced on Tuesday as concerns about the impact of the omicron strain on global economic growth eased, sending the Nasdaq above +3%, the S&P 500 +2.1% and the Dow Jones +1.4%, the highest gain since March for the S&P 500 and Nasdaq.

The rise of more than 3% on the Nasdaq was led by #Intel, up 3.1% after the company announced it will list is subsidiary Mobileeye on the US stock exchange in 2022. Mobileeye is an Israeli driverless car developer acquired by Intel in 2017 for $15.3 billion.

#Tesla closed +4% after UBS raised its share price target of $1,000 from $725, while FactSet’s average price was $851.09. Based on a survey of 41 analysts, 17 recommend a buy, 12 recommend a hold and 12 people recommend a sell.

#Apple rose more than 3.5% to a new all-time high with a market cap of $2.84 trillion after Morgan Stanley raised its share price target from $164 to $200. The announcement of a 30% increase in iPhone production in the first half of 2022 also had a positive effect on the share prices of #Qualcomm (+4.71) and #Micron (+4.1) as suppliers.

However, even if the market is starting to relax from the Omicron concerns but still pressured (especially the technology group) by the possibility that the US Federal Reserve will accelerate the QE cut and raise interest rates faster than expected, the focus of the market right now is on the US November inflation data on Friday, which could be a catalyst for the Fed to tighten policy faster. Monthly inflation is expected to fall to 0.7% from 0.9% in October, but the annual rate could rise to 6.8% from 6.2% the previous month (the highest in 30 years).

Technically speaking, the USA100 has regained its standing above the MA20 after falling and trading below the MA20 line since the discovery of the omicron strain on November 26. It has since seen another test of the all-time high at 16,767, while key support stands at the psychological 16,000.

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Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand

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