Tesla's AI Supercomputer Fuels NASDAQ Rally; Eyes on Inflation Data

The UK released its latest employment data, which has positive and negative aspects. The positive factor in the UK economy is the UK Claimant Claims Count, which reads only 900. The number of individuals claiming unemployment benefits was expected to rise by 17,100. Therefore, an increase of only 900 shows resilience within the economy and the employment sector. However, this also means that there will be upward inflation pressure, which is harmful. In addition, the Average UK Earnings Index rose to 8.5%, a new high and 0.3% higher than previous expectations. Analysts expect higher salaries to make inflation harder to tackle. 

Newton Investment MGMT this morning advises the data is pointing to another interest rate hike. However, we are not likely to see more than one. Another interest rate hike is positive for the Pound but negative for equities including the FTSE100. The Pound earlier in the morning was the best-performing currency and saw more substantial bullish volatility after the employment data. However, traders should note that the Pound is correcting and lowering against some currencies. Yesterday, the US Dollar Index fell below 104.50 for the first time in over a week but is trading 0.11% higher during this morning’s Asian session. The US Dollar Index is trading at 104.66. This morning's best-performing currency is the Swiss Franc, which is increasing in value against all currencies, including the Dollar, Euro, Pound and Yen. 

NASDAQ - Tesla Announces New Supercomputer and Stocks Rise 10%

The NASDAQ saw two clear bullish impulse waves during the Asian-European session and in the middle of the US session. However, the NASDAQ saw a correction in the early US trading hours, measuring a whopping 0.72%. This indicates that buyers control the market, and the momentum is upward. However, traders are also cashing in profits and are quickly selling when the price points downwards. 

Economists and analysts continue to advise that tomorrow's inflation data will determine the performance of the NASDAQ. If the Consumer Price Index indeed reads 0.6% or higher, the NASDAQ may experience a very different trend. However, if the index is lower than 0.6%, the upward trend may gain momentum as other fundamental factors drive the index. For example, some of these fundamental factors include Tesla and Apple. 

Tesla was the best-performing stock within the NASDAQ, increasing its value by 10% within a single session. Morgan Stanley has already come out advising the stock may reach $400. So far this year, the stock has risen 153% and holds a weight of 3.05%, making the stock the 8th most influential for the NASDAQ. Investors bought shares as the company announced a new supercomputer solely developed by Tesla and not by other tech companies such as NVIDIA. Tesla’s own custom supercomputer platform is for AI machine learning and, more specifically, for video training using the video data coming from its fleet of vehicles. Additionally, Apple stocks may experience higher volatility as Apple is about to release its new iPhone. Apple stocks rose 0.66% during yesterday’s session and a further 0.11% after-hours trading.

NASDAQ 2-Hour Chart on September 12th 

A concern for investors is the expensive price, which can be off-putting if nothing fundamentally indicates the intrinsic value is higher. Moving Average Crossovers are indicating the momentum remains upwards on the 4-hour chart and the price is above the VWAP line. However, the price is also close to a recent resistance level from earlier in September and the year’s all-time high. If the price crosses below $15,450.0, sell signals are likely to develop. Though, as mentioned above, this will also largely depend on tomorrow’s inflation data. 

Crude Oil - Investor’s Attention Fixed on Upcoming US Inflation Data

A concern for shareholders and stock investors is the price of Crude Oil, which refuses to correct downwards. The price has formed an ascending triangle pattern with the main resistance point at $87.36. This indicates investors are at a psychological price and struggle to continue purchasing above this level, but simultaneously, downward pressure is fading. This morning's price action formed a bullish impulse wave measuring 0.62% and then a retracement measuring 0.40%. Therefore, the price is higher and still indicates a bullish price movement. However, the instrument has no active bullish signals from the VWAP, order flow book or moving average crossovers. Intraday buy signals will likely form again if the price moves above $87.106. 

Crude Oil Chart on 1-Hour Chart on September 12th

This morning's positive factor for crude oil is the UK data, which indicates a resilient economy. However, investors can also view this as a higher possibility of interest rate hikes, which harms Crude Oil. The European Central Bank on Thursday is also expected to keep interest rates unchanged but give guidance for the next meeting. If tomorrow’s inflation data is higher than expected and the global central bank’s guidance is a definite rate hike, oil prices will likely be pressured. 

As previously mentioned the upward price movement is driven by supply cuts triggering a higher price. Saudi Arabia and Russia last week announced that they will extend voluntary cuts of a combined 1.3 million barrels each day until the end of 2023. Over the past six months, OPEC has advised markets that their price target is $80 per barrel.

Summary:

• UK employment data indicates the Bank of England will consider another interest rate hike and then a pause. The number of individuals claiming unemployment benefits rose to only 900, but salaries continue to increase significantly. 
• This morning's best-performing currency is the Swiss Franc, increasing in value against all currencies, including the Dollar, Euro and Yen. 
• Morgan Stanley advises Tesla stocks potentially may rise to $400 in the upcoming years. Tesla was the best-performing stock within the NASDAQ, increasing its value by 10% within a single session.
• The upcoming US inflation data will determine the performance of the NASDAQ. Tomorrow’s Consumer Price Index will likely confirm if the Federal Reserve will increase interest rates by 0.25%.
• The price has formed an ascending triangle pattern with the main resistance point at $87.36. This indicates investors are at a psychological price and struggle to continue purchasing above this level, but simultaneously, downward pressure is fading.