Nasdaq 100 Rebounds as US Dollar Hits an 8-Month High, APAC to Open Higher

NASDAQ 100, NIKKEI 225, ASX 200 INDEX OUTLOOK:

Dow Jones, S&P 500 and Nasdaq 100 indexes closed -0.19%, +0.13% and +0.51% respectively
The US Dollar extended higher amid rising tapering expectations, better jobless claims data
Asia-Pacific markets are positioned to open higher, but sentiment remains fragile

Tapering, US Dollar, Jobless Claims, China Stocks Plunge, Asia-Pacific at Open:

Wall Street equities closed mixed on Thursday as investors assessed lingering viral concerns and the prospect of reduced central bank stimulus. The FOMC meeting minutespointed to a possible start of tapering stimulus by the end of this year, spurring profit taking. The DXY US Dollar index climbed for a fourth day to 93.56, weighing on commodity prices.

The Nasdaq 100 index climbed 0.51% to 14,933.94, lifted by NVIDIA (+3.98%), Microsoft (+2.08%) and ASML (+1.17%). The flareup of the Delta variant around the world may lead to more spending on digital devices and online services, buoying semiconductor and software companies.

Asia-Pacific markets may continue to trail behind their US peers due to lingering viral concerns and a widening crackdown on private sectors in mainland China. Chinese stocks listed in the US tumbled further, including Tencent (-6.05%), Alibaba (-6.85%) and Nio (-6.61%). Mainland and Hong Kong stocks look set to consolidate further until the regulatory skies are clearer.

Nasdaq 100 Top 10 Stock Performance 19-08-2021

Source: Bloomberg, DailyFX

Meanwhile, weekly initial US jobless claims data came above expectations. Some 348k unemployment claims were filed last week, compared to a 363k estimate. The previous week’s figure was revised down slightly to 377k from 487k. The unemployment claims have been declining over the last few months, underscoring the resilience in the labor market against a viral resurgence.

US Weekly Jobless Claims

Source: Bloomberg, DailyFX

Asia-Pacific markets look set to open mixed on Thursday. Futures in Japan, Australia, Hong Kong, South Korea, Taiwan, Singapore and India are in the green, whereas those in mainland China, Malaysia and Thailand are in the red.

Nasdaq 100 Index Technical Analysis

The Nasdaq 100 index dived below the 20-Day SMA line and has likely entered a technical pullback. An immediate support level can be found at 14,809– the 100% Fibonacci extension. Breaching this level may open the door for further losses with an eye on 14,415 – the 78.6% Fibonacci extension. The bearish MACD indicator suggests that downward momentum is building.

Nasdaq 100 Index – Daily Chart

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

ASX 200 Index Technical Analysis:

The ASX 200 index breached below a key support level at 7,500 – the 200% Fibonacci extension. This may open the door for further downside potential with an eye on 7,340 for support. The MACD indicator formed a bearish crossover and trended lower, suggesting that downward momentum is gaining traction.

ASX 200 Index – Daily Chart