USA100: Economic Outlook, High Yields and Interest Rates Weigh on Stock Indices

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<p>Concerns over the US economy weighed on stocks on Tuesday [26/09], after new home sales in August fell more than expected to the lowest level in 5 months. New home sales in the US in August fell -8.7% m/m to 675,000, weaker than expectations of 698,000. Meanwhile, the US Conference Board Consumer Confidence for September took a hit, falling from the previous reading of 108.7 to 103.0, missing the forecast of 105.9. Although the Current Situation Index registered a slight increase from 146.7 to 147.1, the Expectations Index experienced a more significant decline, falling from 83.3 to 73.7. This drop brought the Expectations Index below 80, a level traditionally seen as an early warning of a recession in the following year.</p>
<p><a href="https://forextraderhub.com/wp-content/uploads/2023/09/Comsumer-Confidence.png"><img decoding="async" class="size-full wp-image-733650 aligncenter" src="https://forextraderhub.com/wp-content/uploads/2023/09/Comsumer-Confidence.png" alt="" srcset="/wp-content/uploads/2023/09/Comsumer-Confidence.png 600w, /wp-content/uploads/2023/09/Comsumer-Confidence-300×182.png 300w" /></a></p>
<p>https://www.conference-board.org/topics/consumer-confidence/press/CCI-Sept-2023</p>
<p>Stocks extended their losses on rising bond yields. The yield on 10-year T-notes on Tuesday rose to a fresh 16-year high of 4.56% and ended up +2.1 bp at 4.55%. The <strong>USA500</strong> index fell -1.47%, the <strong>USA30</strong> fell -1.14%, and the <strong>USA100</strong> closed down -1.51%.</p>
<p>Large cap technology stocks were weaker and weighed on the overall market, amid concerns that global central banks will have to keep interest rates higher for a longer period of time in order to combat inflation. <strong>Amazon</strong> -4%, <strong>Apple</strong> over -2%, <strong>Alphabet</strong> over -2%, <strong>Microsoft</strong> and <strong>Meta</strong> down over -1%. The worsening property debt crisis in China remains a challenge for global stock markets, due to concerns that the debt crisis will derail the country’s growth prospects and drag down the global economy.</p>
<h3>Technical Review</h3>
<p><strong>USA100</strong> – Extended its 3-week decline this week. In Tuesday’s trading, the index was seen trying to surpass the structural support of <strong>14,554.</strong> A move below this support would open the door for a test of the <strong>14,242</strong> support and even the resistance which is the support at <strong>13,722.</strong>  However, if the <strong>14,554</strong> support holds, it could lead to a short rebound which would cloud the outlook. RSI is approaching oversold levels and MACD is poised in the sell zone, validating the recent decline.  Currently, the price is moving below the 50-day average, halfway to the<strong> 200-day EMA or over 3% away from the current position.</strong></p>
<figure aria-describedby="caption-attachment-733666"><a href="https://forextraderhub.com/wp-content/uploads/2023/09/45446202-HFMarketsGlobal-Live1-Hedge-HF-Markets-SV-Ltd.-USA100Daily-9_27_2023-4_51_20-AM-2.png"><img decoding="async" class="size-full wp-image-733666" src="https://forextraderhub.com/wp-content/uploads/2023/09/45446202-HFMarketsGlobal-Live1-Hedge-HF-Markets-SV-Ltd.-USA100Daily-9_27_2023-4_51_20-AM-2.png" alt="" srcset="/wp-content/uploads/2023/09/45446202-HFMarketsGlobal-Live1-Hedge-HF-Markets-SV-Ltd.-USA100Daily-9_27_2023-4_51_20-AM-2.png 1920w, /wp-content/uploads/2023/09/45446202-HFMarketsGlobal-Live1-Hedge-HF-Markets-SV-Ltd.-USA100Daily-9_27_2023-4_51_20-AM-2-300×150.png 300w, /wp-content/uploads/2023/09/45446202-HFMarketsGlobal-Live1-Hedge-HF-Markets-SV-Ltd.-USA100Daily-9_27_2023-4_51_20-AM-2-1024×512.png 1024w, /wp-content/uploads/2023/09/45446202-HFMarketsGlobal-Live1-Hedge-HF-Markets-SV-Ltd.-USA100Daily-9_27_2023-4_51_20-AM-2-768×384.png 768w, /wp-content/uploads/2023/09/45446202-HFMarketsGlobal-Live1-Hedge-HF-Markets-SV-Ltd.-USA100Daily-9_27_2023-4_51_20-AM-2-1536×768.png 1536w, /wp-content/uploads/2023/09/45446202-HFMarketsGlobal-Live1-Hedge-HF-Markets-SV-Ltd.-USA100Daily-9_27_2023-4_51_20-AM-2-696×348.png 696w, /wp-content/uploads/2023/09/45446202-HFMarketsGlobal-Live1-Hedge-HF-Markets-SV-Ltd.-USA100Daily-9_27_2023-4_51_20-AM-2-1068×534.png 1068w, /wp-content/uploads/2023/09/45446202-HFMarketsGlobal-Live1-Hedge-HF-Markets-SV-Ltd.-USA100Daily-9_27_2023-4_51_20-AM-2-840×420.png 840w" /></a><figcaption>USA100, D1</figcaption></figure>
<p><strong>Jamie Dimon,</strong> chairman and chief executive of JPMorgan Chase &amp; Co. floated the idea that US interest rates could reach 7%, a worst-case scenario that could catch consumers and businesses off guard. Traders remain focused on the end-of-month deadline ahead of a possible US government shutdown. Source: Bloomberg.</p>
<p><strong>Click </strong><a href="https://www.hfm.com/en/trading-tools/economic-calendar.html"><strong>here</strong></a><strong> to access our Economic Calendar</strong></p>
<p><strong>Ady Phangestu</strong></p>
<p><strong>Market Analyst – HF Educational Office – Indonesia</strong></p>
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