Daily Market Analysis and Forex News
Target Thursdays: Bulls profit off higher stock indexes
- RUS2000 soars 65 index points post-Fed
- JP225 bulls may’ve claimed over 2k index points
- AU200 rebounds by 109 index points
- CN50 matches year-to-date high with 159-index point climb
- UK100 hits 10-month high; boosted 120 index points
It’s been a good week (so far) for stock indexes!
With the Federal Reserve (US central bank) yesterday sticking to its forecast of lowering US interest rates by 75-basis points in 2024, this has boosted stock markets around the world.
NOTE: The idea of lower interest rates tends to boost riskier assets, such as stocks.
In our Week Ahead article published last Friday (March 15th), we highlighted 5 different stock indexes that could present sizeable trading opportunities this week.
After all, this week featured a slew of key policy decisions by central banks across major economies.
And each of those 5 stock indices reached key prices highlighted in that article!
NOTE: FXTM’s Week Ahead article is published under our “Daily Market Analysis” section of our website every Friday.
Here they are:
1) RUS2000 secures 65 index points in post-Fed profits for bulls
What we wrote on March 15th:
“Looking at technical prices are under pressure on the H4 charts with support found at 2015 and resistance around 2090”
What’s happened since?
Sure enough, this US stock index surged from 2083 up to as high as 2099 right after the Fed’s latest “dot plot” was released.
Then, it hit resistance around that 2090 level, as expected, before easing back lower.
For bulls (those betting that prices would move higher) ...
That move upwards featured profits of as much as 65 index points!
NOTE: FXTM’s RUS2000 index is one 6 new indices launched across our platforms in early March 2024.
2) JP225 breaks out to hit new all-time high!
What we wrote on March 15th:
We highlighted the risk of the Bank of Japan “ending its negative rates” regime with a rate hike, which could trigger a “breakout” for the JP225 stock index.
What’s happened since?
Sure enough, the BoJ did hike by 10 basis points, shedding its tag as the last central bank in the world to sill hold on to negative interest rates.
NOTE: Rate hikes are typically negative for stocks; that BoJ hike in isolation should’ve prompted the JP225 to fall.
Instead, and more importantly for markets, the BoJ suggested that more rate hikes could be harder to come by later this year.
In other words, Japan’s interest rates may not rise as much as feared in 2024.
Such relatively “dovish” cues send JP225 on a "breakout" to the upside!
As a result of the latest policy signals out of the BoJ and the Fed, the JAP225 stock index is now flirting with the psychologically-important 41,000 mark for the first time in its history.
Along the way, JAP225 may have secured as much as 2,055 index points in profits for bulls so far this week.
11 of FXTM's 18 different stock indices have already reached their respective record highs so far in 2024!
3) AU200's technical rebound reaches 109 index points, for now
What we wrote on March 15th:
“Looking at the charts, a technical rebound could be brewing with a breakout above 7765 bringing bulls back into the game, opening a path back towards the all-time high."
What’s happened since?
On Tuesday (March 19th), the Reserve Bank of Australia abandoned its "hawkish" stance (desire to raise interest rates further), as it kept its cash-rate target at 4.35%.
With the RBA, and later the Fed, showing their respective biases for rate cuts later this year ...
That fuelled the "rebound" in the AU200, which hit the 7765 key level as cited in last Friday's article.
Traders who had bought the AU200 at Friday’s close (after the Week Ahead article was published on March 15th), and held on until the cited 7765 key level, stood to gain as much as 109 index points already.
A successful daily close above 7765, followed by a return to the all-time high at 7862.9, would mark additional profits of about 98 index points.
In other words, there could be more potential profits ahead.
4) CN50 index respected bullish channel with 159 index point climb
What we wrote on March 15th:
“Prices are bullish with further upside on the cards beyond 12240.”
What’s happened since?
Since last Friday’s closing price, the CN50 index, which tracks the FTSE China A50 index, has climbed by as much as 159 index points so far this week.
Chinese stocks were boosted by Monday's (March 18th) better-than-expected economic data, followed by more risk-on sentiment over the course of the week.
Today (Thursday, March 21st), its intraday high has matched last week’s (March 12th) intraday high of 12,247.3, briefly surpassing “beyond” 12,240 – as mentioned in last Friday’s article.
At 12,247.3, that also marks CN50's highest price so far in 2024!
5) “Dovish” Fed & BOE boost UK100 to highest levels since May 2023
What we wrote on March 15th:
“A solid weekly close above 7740 could open a path back towards 7930.”
What’s happened since?
Today (Thursday, March 21st), the Bank of England (BOE) kept its rates unchanged at 5.25%, as widely expected.
More importantly, two hawks (namely Catherine Mann and Jonathan Haskel) dropped their votes to hike interest rates.
This is the first time since September 2021 that no member of the BOE’s Monetary Policy Committee (MPC) has voted to raise UK interest rates!
Such a dovish pivot by the MPC amplified the Fed’s similar signals yesterday (Wednesday, March 20th), which combined to boost the UK100 by just about 120 index points!
The ongoing surge has sent the UK100 stock index coursing towards 7930, as outlined in our previous Week Ahead article.
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