Skip to Content
News & Analysis at your fingertips.
Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Nasdaq 100 Outlook: Animal Spirits Set Free as Big Banks Unite to Save First Republic

Nasdaq 100 Outlook: Animal Spirits Set Free as Big Banks Unite to Save First Republic

Diego Colman, Contributing Strategist

Share:

NASDAQ 100 FORECAST:

  • Nasdaq 100 rallies despite rebound in Treasury yields as positive market mood boosts appetite for riskier assets
  • Sentiment improves following news that bank giants, including JPMorgan and Citigroup, have joined forces to rescue regional lender First Republic
  • This article looks at key Nasdaq 100 technical levels to watch in the near term
Equities Forecast
Equities Forecast
Recommended by Diego Colman
Get Your Free Equities Forecast
Get My Guide

Most Read: Gold Price Forecast - XAU/USD Slips but Retains Bullish Bias on Bank Sector Mayhem

The Nasdaq 100 surged on Thursday as market sentiment took a turn for the better after Credit Suisse tapped a lifeline from Swiss regulators and big U.S. financial firms joined forces to rescue First Republic Bank, a regional depository institution on the brink of failure following the collapse of SVB and SBNY.

In late afternoon operations, the Nasdaq 100 was on track for a daily gain of nearly 3%, trading at its highest level in a month (12,720), with Amazon, Alphabet and Nvidia rallying more than 4% despite the sharp rebound in Treasury yields, which saw the 2-year note rise more than 20 bps to 4.13% in a volatile session.

Investors cheered news that JPMorgan, Citigroup, Bank of America, Wells Fargo, Morgan Stanley and PNC have allegedly teamed up to deposit some $30 billion with First Republic Bank, in a U.S. government-led effort to shore up troubled lending institutions amid growing systemic risks.

Today's developments, along with the Federal Reserve's emergency measures put in place on Sunday to offer loans to regional lenders facing liquidity constraints, may temporarily ease Wall Street’s concerns about a banking sector meltdown, but the underlying malady is still unresolved and may flare up again soon.

2023 FED FUTURES IMPLIED YIELDS & TREASURY RATES

Chart, histogram  Description automatically generated

Source: TradingView

Looking ahead, the equity market remains in a precarious position. Sentiment may seem to be on the mend following a couple of bullish days on Wall Street, but the broader outlook continues to be challenging in the face of sticky inflation and increasingly restrictive monetary policy.

After recent events, traders have repriced lower the Fed’s tightening path as seen in the chart above, but policymakers could push back against extremely dovish expectations if banking-system-related stress abates further in the coming days. We’ll know more next week when the FOMC announces its March decision, but this is a key risk to keep in mind.

US 500 Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 5% 0% 2%
Weekly -14% 4% -2%
What does it mean for price action?
Get My Guide

NASDAQ 100 TECHNICAL ANALYSIS

In terms of technical analysis, after breaking above trendline resistance, the Nasdaq 100 managed to hit its best level in four weeks, pointing to unleashed animal spirits. With momentum on its side, the tech index could soon recapture its 2023 highs around 12,900, an area of critical resistance created by the 38.2% Fib retracement of the November 2021/October 2022 sell-off. On further strength, the focus shifts to 13,745. In case of a bearish reversal, initial support rests at 12,350. Below that, the next floor to keep in mind corresponds to the 200-day simple moving average.

NASDAQ 100 TECHNICAL CHART

Graphical user interface, chart, histogram  Description automatically generated

Nasdaq 100 Futures Prepared Using TradingView

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

DISCLOSURES