{"id":106107,"date":"2025-03-19T16:09:36","date_gmt":"2025-03-19T14:09:36","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=106107"},"modified":"2025-03-19T16:09:51","modified_gmt":"2025-03-19T14:09:51","slug":"equities-report-us-equity-bears-seem-to-hesitate","status":"publish","type":"post","link":"https:\/\/www.ironfx-cn.com\/ar\/equities-report-us-equity-bears-seem-to-hesitate\/","title":{"rendered":"Equities report: US equity bears seem to hesitate"},"content":{"rendered":"

US equity markets seem to remain relatively undecisive about their direction. In todays\u2019 report we are to discuss the fundamentals surrounding US equities markets, the Fed\u2019s interest rate decision later today and have a look at the takeover of WIZ by Alphabet. We are to conclude the report with a technical analysis of Nasdaq\u2019s daily chart for a rounder view.<\/p>\n\n\n\n

The fundamentals continue to weigh on equities<\/h2>\n\n\n\n

Uncertainty continues to be spread across markets and particularly the equities markets. The uncertainty for the US economic outlook seems to be the primary factor behind the weakening of US equities. It\u2019s characteristic that the Atlanta Fed GDP rate for Q1 25, has improved reaching a -1.8% yet remains obviously in contractionary territory. In addition to growth we also note an easing US employment market and inflation that could have a negative effect on revenue figures of the corporate world. Overall should market worries for the US economic outlook intensify we may see US equites weakening further. Yet market worries about growth tend to expand also beyond the US, on a global level, as the US-led trade wars seem to widen and intensify. We note that OECD has slashed its forecasts for growth in the economies of Canada and Mexico, which are primarily being affected by US President Trump\u2019s tariffs. We also note the tariffs imposed on European products entering the US and expect the issue to widen and intensify further as the EU is reported to intensify its crackdown on US big tech companies such as Apple, Meta and Google. Overall EU regulations were always an irritating factor for US businesses and the US Government, especially US President Trump seems ready to impose additional tariffs as a response. But the US tariffs are expected to have an internal effect in the US economy as it may raise prices further, practically causing US consumers to struggle. In general any further indication of escalating tensions in international trade, could intensify the market worries thus weighing further on US equities.<\/p>\n\n\n\n

The Fed\u2019s forward guidance could go either way<\/h2>\n\n\n\n

On a monetary level, we highlight the Fed\u2019s interest rate decision later today as a key factor behind US stock markets\u2019 direction. The market expects widely the bank to keep rates unchanged today, yet at the same also seems to be pricing two rate cuts to come until the end of the year, with the one being in June and the second in September, as per Fed Fund Futures (FFF). Overall today we tend to see the case for the bank to remain on hold and consider the bank\u2019s forward guidance as the main issue. The bank on a fundamental level seems to find itself between a hammer and an anvil, as one the one hand the easing inflation and US employment market could allow for the bank to expedite any rate cuts, yet on the flip side, Trump\u2019s policies, especially the tariffs on products entering the US and his immigration policies, could have in inflationary effect on the US economy, advising caution with any further rate cuts. We split the bank\u2019s forward guidance into four elements with the first being the accompanying statement and should a more hawkish tone be adopted by the bank we may see it weighing on US equities, as it would imply tighter financial conditions for longer in the US economy. Also we note the release of the Fed\u2019s new dot plot and should Fed policymakers suggest that they expect rates to remain higher than what the market expects by the end of the year, we may see it having a bearish effect on US stockmarkets. Thirdly we would note the banks\u2019 macroeconomic projections and more optimistic outlook by the bank for growth and a faster easing inflation could support US stockmarkets. Lastly, Fed Chairman Powell\u2019s press conference, half an hour after the release could extend volatility for US stockmarkets. The Fed Chairman is well known to be able to reverse the market\u2019s initial reaction in his press conferences. Should the Fed Chairman sound hawkish enough, US stockmarkets could weaken further.<\/p>\n\n\n\n

Alphabet\u2019s intentions to take over Wiz could support its share price<\/h2>\n\n\n\n

Google\u2019s owner Alphabet is to buy Wiz a cybersecurity company for a staggering $32 billion. If the transaction actually takes place its to be the most expensive acquisition by Alphabet. It\u2019s characteristic that Alphabet had proposed a bid of $23 billion in the summer which was rejected by Wiz. Wiz is a US-Israeli cyber security company, founded in 2020. It\u2019s addition is expected to compliment Alphabet\u2019s cloud business segment and strengthen it further. The addition as per comments of Alphabet\u2019s CEO Pichai will turbocharge improved cloud security and the ability to use multiple clouds. Overall, despite the acquisition being quite pricey, we expect it to provide halt the tumbling of Google\u2019s share price, maybe even provide some support.<\/p>\n\n\n\n

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US100 Daily Chart<\/h2>\n\n\n\n
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