Nasdaq 100 Staggers Decrease as Democratic Sweep in Georgia Appears Seemingly

Nasdaq 100 Index, US Senate Runoffs, Company Taxation, Part 230, Filibuster – Speaking Factors:

• Fairness markets traded broadly combined throughout APAC commerce as buyers eyed the 2 Senate run-off elections in Georgia.
• The probability of a Democratic Senate and Home might undermine US fairness markets within the close to time period.
• The Nasdaq 100 might be vulnerable to prolonged losses as worth challenges key uptrend assist.

Asia-Pacific Recap

Fairness markets traded broadly combined throughout Asia-Pacific commerce as buyers intently eyed the US Senate run-off elections in Georgia.

Australia’s ASX 200 index fell 1.12% whereas Japan’s Nikkei 225 index slipped 0.4%, because the nation registered a report enhance in coronavirus infections.

Hong Kong’s Cling Seng index nudged marginally increased regardless of reviews of a flurry of arrests underneath the nationwide safety legislation imposed final 12 months.

In FX markets, the cyclically-sensitive AUD, NZD and NOK largely outperformed, whereas the haven-associated USD and JPY misplaced floor. Gold and silver costs dipped decrease as yields on US 10-year Treasuries surged above 1% for the primary time since March 2020.

Trying forward, a flurry of PMI figures out of Europe headline the financial docket alongside the minutes from the Federal Open Market Committee’s financial coverage assembly in December.

DailyFX Financial Calendar

Seemingly Blue Wave Sends the Nasdaq 100 Tumbling Decrease

The rising probability of a Democratic sweep within the two Senate run-off elections in Georgia despatched the tech-heavy Nasdaq 100 tumbling decrease, as buyers mulled the potential implementation of tighter regulatory controls and company tax hikes underneath an unchecked Biden administration.

On the time of writing, Democratic challenger Raphael Warnock appears to be like set to defeat incumbent Kelly Loeffler, whereas her Republican counterpart David Perdue is locked in a good battle with Jon Ossoff. Nonetheless, with the excellent ballots coming from Democratic strongholds, there’s a sturdy risk that Ossoff will finally overcome Perdue.

Certainly, the New York Instances Election Needles recommend that Messrs Warnock and Ossoff will prevail of their respective races. This situation would end result within the Senate being break up 50:50 between either side of the aisle, with Vice President-elect Kamala Harris casting the tie-breaking votes.

Supply – New York Instances

Biden has hinted at elevating the present stage of company taxation from 21% to 28% and has additionally been a staunch critic of Part 230 of the Communications Decency Act of 1996 – a legislation that shields social media firms from being accountable for what their customers put up.

Subsequently, it’s hardly stunning that the Nasdaq 100 has slipped decrease given the latest developments. That being mentioned, the power of Senate Republicans to filibuster the Biden administration’s agenda might forestall these legislative proposals from being adopted.

Nonetheless, the opportunity of regulatory change and tax hikes could undermine the value of expertise firms within the close to time period, if Democrats efficiently take management of the Senate.

Supply – Determination Desk

Nasdaq 100 Index Futures Every day Chart – Difficult Key Uptrend Help

From a technical perspective, the tech-heavy Nasdaq 100 index might be vulnerable to additional losses, as confluent assist on the uptrend extending from the March 2020 low and psychologically imposing 12600 stage comes underneath stress.

With the RSI plunging again under 60 and a bearish crossover going down on the MACD indicator, the trail of least resistance – no less than within the close to time period – appears skewed to the draw back.

A each day shut under the January Four low (12959) might be required to validate the break of uptrend assist and set off a push to check vary assist at 12100 -12150. Clearing that most likely opens the door for sellers to drive costs again in direction of the November 10 low (11503).

That being mentioned, bullish MA stacking means that an prolonged draw back push is comparatively unlikely. Subsequently, a retest of the yearly excessive is hardly out of the query, if uptrend assist stays intact.

Hurdling that possible indicators the resumption of the first uptrend and brings the 13200 stage into focus.

Nasdaq 100 index futures each day chart created utilizing Tradingview

— Written by Daniel Moss, Analyst for DailyFX

Observe me on Twitter @DanielGMoss