Nasdaq 100 Index rose the most in a week after a significant drop a week before, while Treasuries declined and the dollar rallied with growing expectation that Trump administration is making efforts to reform the tax plan.
NAS100 surged 1.46 percent or 84.5 points to close at 5818.3, rallying strongly back to 5-day moving average. The biggest gainers of the session on the NAS100 were Vertex Pharmaceuticals Inc (NYSE:VRTX), which rose 4.34 percent or 6.47 points to close at 155.48. Activision Blizzard Inc (NYSE:ATVI) gained 4.01 percent or 2.48 points to end at 64.26 and Fastenal Company (NYSE:FAST) was up 3.58 percent or 1.43 points to 41.40 in late trade.
However, The biggest losers included Ulta Beauty Inc (NYSE:ULTA), lost 1.09 percent or 2.56 points to end at 231.65, while Intel Corporation (NYSE:INTC) declined 0.77 percent or 0.27 points to 34.65 and Mattel Inc (NYSE:Mat) shed 0.67 percent or 0.11 points to close at 16.31.
Trump’s team and lawmakers are making significant strides in shaping a tax overhaul, moving far beyond the six-paragraph framework pushed out in July that stoked fears about their ability on one of the GOP’s top priorities. Nowadays there is broad consensus on some of ways to pay for cutting both the individuals and corporate tax rates, including capping the mortgage interest deduction for homeowners and scrapping people’s ability to deduct state and local taxes.
After the failure to repeal Obamacare, Repbulicans are under pressure and eager to make serious moves on tax reform, which area could animate the president, business community and rebuild public’s confidence in Republicans far more than the nuts and bolts of health care ever did.
Despite a continuous growth of stock market, HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting sign that global markets are in the last stage of their rallies before a downturn in the business cycle.
Oxford Economics Ltd. marco strategist Gaurav Saroliya used an indicator — the gross value-added of non-financial companies after inflation – for U.S. equity bulls, which shows negative on a year-on-year basis. Compared with former recession points, the positioning of U.S. real corporate surpluses showed that we are probably very late in the cycle.
Chart 1: US Real Gross Corporate Surpluses
Technically even though with a sign of daily descending Relative Strength Index at 51.4429, NAS100 is still moving in a gaining momentum. Right after finding support at 5770.2 (50.0% retracement), it is now struggling right below 5885.1 (23.6% retracement), which can be regarded as a resistance. In the event of its breakout, further rise towards July 27’s high of 5988.7 would occur.
Chart 2: NAS100 Daily
From a glance in a longer term of weekly chart, we could see a few long upper shadow in candle sticks for past few weeks. It probably shows that a high resistance above prevents the index from breaking out. If it fails to break higher, investors should be more cautious about a potentially downward risk.
Chart 3: NAS100 Weekly