NQ Holds Support!
The Nasdaq has struggled in 2024, but recently major support was held. The release of Wednesday’s Retail Sales numbers showed a larger-than-expected increase at 0.6% vs. 0.4%. A noticeable increase was observed in General Merchandise Stores, which contributed 0.13%, and Motor Vehicle and Parts Dealers, which contributed 0.21% in sales. These two components alone made up for more than half of the increase in December's retail sales.
The Market's Expectations of Interest Rate Cuts:
Coming into 2024, the market had priced in 150 basis points worth of interest rate cuts. We have seen interest rate expectations trade within the range of 125 basis points to 150 basis points. After the release of retail sales, the market took one 25 basis point cut off the table for 2024, and the probability of an interest rate cut happening as soon as March was dampened.
The CME Fed Watch tool now reflects a 50% chance of an interest rate cut at the March Fed meeting; these probabilities have drastically fallen since the high 80% probabilities observed at the beginning of the year.
Can the market move away from trading off interest rate cuts?
Although the Nasdaq closed in negative territory on Wednesday’s trade, it held major support, above the support pocket and above the 21-Day EMA. If the economy can remain resilient and growth can persist, equity markets may not need to see lower interest rates to push higher.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
The Market's Expectations of Interest Rate Cuts:
Coming into 2024, the market had priced in 150 basis points worth of interest rate cuts. We have seen interest rate expectations trade within the range of 125 basis points to 150 basis points. After the release of retail sales, the market took one 25 basis point cut off the table for 2024, and the probability of an interest rate cut happening as soon as March was dampened.
The CME Fed Watch tool now reflects a 50% chance of an interest rate cut at the March Fed meeting; these probabilities have drastically fallen since the high 80% probabilities observed at the beginning of the year.
Can the market move away from trading off interest rate cuts?
Although the Nasdaq closed in negative territory on Wednesday’s trade, it held major support, above the support pocket and above the 21-Day EMA. If the economy can remain resilient and growth can persist, equity markets may not need to see lower interest rates to push higher.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
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