Nasdaq 100 Index Drops As CEO Confidence Index Hits 10-Year Low

Summary:

The drop in the CEO Confidence Index to 10-year lows has triggered a mild selloff in the Nasdaq 100 index this Monday.

The Nasdaq 100 index opened higher on the day but has lost all its gains and now trades 0.46% lower as optimism about improving the global outlook seemed to fade.

China’s lifting of the Shanghai lockdowns has also appeared not to excite the risk-sensitive Nasdaq 100 index. US long-term yields are 1.18% higher on the day, reflecting the continued shift of investment capital from the stock market to the bond market.

This week’s major fundamental trigger for the US markets is the Fed’s inflation gauge, the Core PCE Price Index (m/m). The period covered in the same period showed a spike in consumer inflation to 41-year highs. A higher-than-expected print could reinforce additional rate hikes bet, potentially lowering the Nasdaq 100 index.

The Independence Day weekend means that the customary release of the US jobs numbers on the first Friday of the month will be delayed to next week. Morgan Stanley says declining CEO confidence could show new risks to the outlook for employment. This indication from the investment bank came as CEO Confidence Index fell to 5.6/10, the lowest level in ten years.

As of writing, the Nasdaq 100 index is down 0.18%.

Nasdaq 100 Index Outlook

The rejection at the 12208.5 resistance level sets off a potential move toward the 11816.4 support level (26 May and 10 June lows). If there is a further decline below here, 11587.7 becomes an additional downside target. The 11,000 psychological support at the 16 June low is another southbound target that becomes available if the bears can degrade the 13 June and 22 June lows at 11285.2.

Conversely, the door opens toward the 12562.3 resistance if the bulls can uncap the intraday resistance at 12208.5. The former intersects the channel’s upper border, forming an added resistance. 12772.9 (8 June high) is the immediate upside target following a break of this combined resistance, with 12992.5 and 13421.5 entering the picture as additional northbound targets.