The Nasdaq 100 Index and its top exchange-traded funds (ETFs) like the QQQ and JEPQ are stuck in a tight range this week as investors wait for key corporate and macro news from the United States.
The index was trading at $25,787, a few points below the all-time high of $26,787. This article explores some of the top catalysts to watch this week.
Nasdaq 100 Index ascending triangle points to a bullish breakout
One potential catalyst for the Nasdaq 100 Index is that it has formed an ascending triangle pattern, a common continuation sign in technical analysis. This pattern is made of a horizontal line, which, in this case, is at $25,860. It also has a diagonal trendline, which connects the lowest point in November, December, and this month.
The index has also remained above the 50-day Exponential Moving Average (EMA) and the Supertrend indicators. It is also above the Supertrend indicator.
Therefore, the most likely scenario is where the stock makes a strong bullish breakout in the coming weeks, potentially to the all-time high of $26,178. A move above that level will point to more gains, potentially to the psychological level at $27,000.
Corporate earnings season
The other key catalyst for the Nasdaq 100 Index and its ETFs, like QQQ and JEPQ, is the upcoming corporate earnings from some of the biggest companies in the United States.
JPMorgan, Bank of New York Mellon, and Delta will be the first companies to publish their numbers on Tuesday. Bank of America, Wells Fargo, and Citigroup will publish on Wednesday, while Morgan Stanley, Goldman Sachs, and BlackRock will publish on Thursday.
While all these companies are not in the Nasdaq 100 and its ETFs, chances are that they will set the tone on what to expect in this earnings season.
Data compiled by FactSet shows that the average earnings estimate is that they grew by 8% in the fourth quarter. However, the final data will likely be better than estimates as it has always done.
More earnings will continue to come out in the next few weeks, including popular names like Microsoft, Apple, Microsoft, and Meta Platforms.
US macro data
Meanwhile, the Nasdaq 100 Index and key ETFs like QQQ and JEPQ will react to the upcoming US macro data, which will help to set the tone for the Federal Reserve.
The first important data will come out later today. Economists expect the data to show that the headline Consumer Price Index (CPI) rose 2.6% and the core CPI rose 2.7%.
US inflation data is important as it will help to determine what the Federal Reserve will do in its next meetings this year.
The inflation report comes a few days after the Bureau of Labor Statistics (BLS) released the relatively mixed nonfarm payrolls (NFP) data. The data showed that the economy created 5ok jobs, while the unemployment rate improved from 4.6% in November to 4.4%.
Meanwhile, the US will release the latest Producer Price Oscillator (PPO) and retail sales on Wednesday.
These numbers come in the same week the Justice Department announced a possible lawsuit against Jerome Powell, the head of the Federal Reserve. Most analysts believe that the lawsuit is because of the ongoing differences between Jerome Powell and Donald Trump.
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