It goes without saying everyone has been eyeing when the fed will cut the interest rates. Initially, there has been a certain expectation that interest cuts would come as early as March but now that has been even questioned. Will the Fed wait till later in the summer or will it be in Spring.
Data indeed supports the theory that cuts could come early with inflation cooling down. Some analysts have said that it is going to be a wait and see approach. The expectation is that data out of december will show that the US economy is indeed strong and that it continues to add jobs month after month.Â
If one looks at the QQQ and SPY charts, we can see that we are nearing 2021 all time highs. In reality if we dive deeper into what’s going on, there are two things to highlight. One, the indices are testing those all time highs and they are becoming key resistance points. From a job data perspective high tech companies that were driving the growth prior to 2023 haven’t recuperated yet. In fact, in January 2024 the likes of Google and amazon have had an additional round of layoffs to cut costs, terminate products and to adjust portfolios in light of recent AI trends.
We have reached an interesting point from a chart perspective either we break current resistance levels and start establishing new highs or go back and test recent support levels. There are many catalysts this year among them are without surprise the interest rates and the presidential election. One must look at chinese economy through FXI. Not to forgot also several hot zones globally including the red sea (and the middle-east) and the ongoing war in Ukraine.
