Wall Street ended sharply higher on Tuesday (29/08/23) lifted by Tesla, Nvidia, and other megacap growth stocks after a drop in monthly job openings that fell below expectations cemented expectations of a pause in interest rate hikes by the Federal Reserve. The S&P500 and Nasdaq led the way with gains above 1%, giving the= S&P500 its biggest gain since June 2, while the Nasdaq also posted its best gain since July 28; in fact, both closed at 2-week highs. The market euphoria was a result of the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) showed the number of job openings stood at 8.8 million in July, below expectations of 9.46 million. The JOLTs figure has fallen for the third straight month, signaling easing labor market pressures. The Conference Board (CB) showing US Consumer Confidence fell to 106.1 in August, compared with expectations of 116. Treasury yields continued to slide along with the weak economic data releases above, also fueling expectations that the Fed will hold interest rates in place at the September FOMC Meeting; where the market began to calculate a 90% chance that this might happen (up from 80% probability last week), as reported by Investing.com’s Fed Rate Monitor Tool. Germany also released the GfK German Consumer Climate: a survey measuring consumer confidence in business activity, which seems to be still quite pessimistic in assessing the current business situation and in September. On the other hand, French Consumer Confidence for August managed to meet expectations at 85, also the same figure as the previous month. This morning it is Japan’s turn to publish Japan Household Confidence, an index that measures the consumers’ attitude. The data is taken from a survey of 5000 households to determine household spending patterns and their relationship with personal income, purchasing power, employment, and business climate conditions in Japan. Later in the evening, Germany will release Inflation figures for August which are predicted to ease further to 6.0% yoy from 6.2% in July. Another employment data from the US that will be in the public spotlight tonight is the ADP Nonfarm Employment Change which estimates the addition of labor in the private sector for August also fell to 195 thousand from 324 thousand in July. The US is also expected to solidify the quarterly 2Q23 GDP figure at 2.4% qoq (vs previous 2.0%); while market participants anticipate a sluggish home sales market as Pending Home Sales (July) data is forecast to drop 0.1% compared to 0.3% growth in the previous month. WTI crude oil prices successfully surged 1.6% this morning to USD 81.42/barrel as US crude, gasoline, and refined oil reserves unexpectedly plunged by 11.486 million barrels, missing estimates by around -2.9 million barrels. This is arguably the second largest decline since January 2018. The news was an additional boosting catalyst in addition to the threat of inventory disruptions due to tropical storms over the US Gulf Coast, and the fact that Saudi Arabia’s overseas inventories collapsed by more than USD 16 billion last month, the sharpest decline since oil prices weakened during the pandemic. Speaking of other commodities, Gold prices began to stabilize as demand for the metal started picking up after the US released weak Manufacturing PMI data last week.

JCI rallied to its strongest Closing level since the beginning of the year, trying to break the critical Resistance area of 6950-6970 which has been a scourge for the last 8 months. Will it be successfully broken and bring JCI to 7000 area? NHKSI RESEARCH must remind us that technically there is an RSI negative divergence on the strength of current buying momentum; however, price movement holds the power over the indicator. Therefore investors/traders can still maintain bullish optimism (considering EIDO +1.47%), while not ruling out the possibility of a JCI pullback, as usual.

Download full report HERE.