Stock markets are modestly higher on Thursday, recovering some of Wednesday’s losses as investors seemingly struggle to determine where things stand.

There’s clearly a desperate desire to cling on to the optimism that enabled such a strong end to the year but unlike in that period, the data isn’t really playing ball. The releases we’ve seen so far this month have been fine and in the main, perfectly in keeping with the expectations people had coming into 2024. But is that enough?

Pricing on interest rates was very aggressive at the end of 2023 and perhaps the data needed to keep overdelivering to keep the party going. There’s still a sense that it could again which is why there’s seemingly so much reluctance to allow markets to correct in any significant way but at some point, the data needs to justify such loyalty or investors may start to worry that central banks won’t be swayed.

Double Top Concerns in the Nasdaq

The Nasdaq index is once more trading around record highs, but on this occasion, there doesn’t appear to be much momentum with it. The index has run into resistance today at around 17,000, the same level it failed at in late December. It did so on this occasion with the stochastic and MACD not even close to registering new highs alongside price so even if it did reach a new high, it would have formed quite a significant divergence.

Source – OANDA