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Nasdaq 100 Hits All-Time High, Lifting Nikkei 225 and ASX 200

Nasdaq 100 Hits All-Time High, Lifting Nikkei 225 and ASX 200

Margaret Yang, CFA, Strategist

NASDAQ 100, HANG SENG, ASX 200 INDEX OUTLOOK:

  • Dow Jones, S&P 500 and Nasdaq 100 indexes closed +0.78%, +0.60% and +0.65% respectively
  • Traders are eyeing Friday’s nonfarm payrolls report for clues about the Fed’s policy outlook
  • Asia-Pacific markets are positioned to open higher. Japanese household spending disappoints

Nonfarm Payrolls, Jobless Claims, Nikkei 225, Asia-Pacific at Open:

Wall Street equities edged broadly higher on Thursday as robust US corporate earnings boosted sentiment, easing worries about the pandemic’s impact. The Nasdaq 100 index closed at an all-time high of 15,181, lifted by PayPal (+1.88%), NVIDIA (+1.79%) and Facebook (+1.13%). The flareup of the Delta variant around the world may lead to a slower economic recovery, potentially delaying the Fed’s tapering agenda.

This put today’s nonfarm payrolls data under the spotlight, as traders seek further clues about the health of the labor market and its ramifications for the Fed’s policy guidance. Prior to this, ADP released a much poorer-than-expected private employment report, with only 330k new jobs added in July -the lowest pace of expansion in six months. This also marked a sharp fall from June’s reading of 680k.

Nonetheless, several Fed officials gave hawkish-biased comments as they remained positive on the growth outlook. Fed Governor Christopher Waller said that accommodative monetary policy could pull back sooner than some people expect, echoing Vice Chairman Richard Clarida’s hawkish-biased comments a day ago.

Asia-Pacific markets may continue to trail behind their US peers due to lingering viral concerns and a widened crackdown on private sectors in mainland China. Liquor and e-cigarette stocks fell on Thursday amid fears that they may be the regulator’s next target. Mainland and Hong Kong stocks look set to consolidate further until the political skiers are clearer.

Nasdaq 100 Top 10 Stock Performance 05-08-2021

Nasdaq 100 Hits All-Time High, Lifting Nikkei 225 and ASX 200

Source: Bloomberg, DailyFX

Meanwhile, weekly initial US jobless claims data came in line with expectations. Some 385k unemployment claims were filed last week, compared to a 384k estimate. The previous week’s figure was revised down slightly to 399k from 400k.

US Weekly Jobless Claims

Nasdaq 100 Hits All-Time High, Lifting Nikkei 225 and ASX 200

Source: Bloomberg, DailyFX

The Nikkei 225 index looks set to open mildly higher, but sentiment may be weighed by a disappointing household spending figure. Japanese household spending fell 5.1% YoY in June, compared to a 0.1% estimate. This shows that consumers were pulling back amid state of emergency even before the recent explosion in infections. With Covid-related restrictions dampening consumption, the road to recovery seems to be longer.

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 Hits All-Time High, Lifting Nikkei 225 and ASX 200

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 is trending below the neutral line, suggesting that upward momentum may be weak.

Nikkei 225 Index Daily Chart

Nasdaq 100 Hits All-Time High, Lifting Nikkei 225 and ASX 200

ASX 200 Index Technical Analysis:

The ASX 200 index is challenging a key resistance level at 7,500 – the 200% Fibonacci extension. A successful attempt may expose the next resistance level at 7,760 – the 268.1% 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 gaining traction.

ASX 200 Index – Daily Chart

Nasdaq 100 Hits All-Time High, Lifting Nikkei 225 and ASX 200

--- Written by Margaret Yang, Strategist for DailyFX.com

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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