Nasdaq 100 Forecast: QQQ muted after retail sales drop

US futures

Dow future 0.01% at 44662

S&P futures 0.08% at 6116

Nasdaq futures 0.5% at 22073

In Europe

FTSE -0.30% at 8730

Dax  -0.34% at 22536

• US retail sales fall 0.9% MoM vs -0.1% expected
• Data raises concerns over the health of the consumer
• Trade war fears ease after Trump delays reciprocal tariffs
• Oil rises across the week after 3 weeks of losses

Retail sales drop sharply by -0.9%

US stocks are pointing to a quiet start as investors await more details on trade tariffs and amid rising concerns over the health of the US consumer.

Retail sales, a key measure of consumer spending, fell faster than expected, dropping 0.9% month on month after rising 0.7% in December, an upward revision from 0.4%.

Weak retail sales could raise questions about the health of the consumer and the Federal Reserve's less dovish stance. The Fed is expected to keep interest rates on hold over the next few meetings, and according to the CME Fed watch tool, there is just a 50% chance of the Fed cutting rates in July. The market is only seeing a 25 basis point rate cut this year  and that could be in December. High rates for longer could put more pressure on the US consumer, which is problematic given that household spending is a key driver of economic growth.

The mood remains subdued as investors also await more clarity on President Trump's reciprocal tariff plans. The three leading indices on Wall Street posted gains yesterday and are set to rise across the week as the reciprocal tariffs appear to have a delayed implementation, which could provide room for negotiation.

While tariff news created lots of volatility a few weeks ago, it seems that the market is now becoming numb to these announcements, noticing them as more of a negotiating tool than anything else.

Corporate news

Moderna falls over 4% after a larger-than-expected loss in Q4 as the firm continues to slash costs and sees lower demand for its COVID-19 vaccine.

GameStop rises 8% on reports that the video game retailer is considering buying Bitcoin and other cryptocurrencies as alternative asset classes.

Airbnb is set to rise 14% after the short-term housing rental firm posted Q4 earnings and sales that beat forecasts, thanks to a jump in the number of first-time users.

Palo Alto Networks is falling over 4% after the cyber security firm issued a disappointing earnings outlook.

Nasdaq 100 forecast – technical analysis.

The Nasdaq once again recovered off the 50 SMA and has risen above the 22k resistance zone, heading towards 22,133 and fresh record highs. The bullish outlook is supported by momentum. Sellers need to take out the 50 SMA support around 21,500 to open the door to 21k.

FX markets – USD falls, GBP/USD rises

USD is falling after weaker-than-expected retail sales, which suggests that the US consumer is no longer healthy. For further clues, attention will be on next week’s US consumer confidence data.

EUR/USD is rising after stronger-than-expected GDP growth in Q4. The eurozone economy grew 0.1% QoQ, ahead of the 0% growth forecast. The pair trades at a two-week high.

GBP/USD is rising to 1.26, capitalizing on the weaker USD. Investors look ahead to UK unemployment and inflation data next week for fresh cues over the Bank of England's policy outlook. The data comes after the central bank cut rates by 25 basis points to 4.5% last week.

Oil rises across the week as trade war fears ease

Oil prices are rising on Friday and are set to snap a three-week losing run boosted by rising fuel demand and expectations that plans for US reciprocal tariffs won't come into effect before April, easing concerns over trade wars.

The longer timeline gives more room for negotiations and a trade consensus to be reached.

However, the upside in the oil market may be limited, given the optimism surrounding any potential Ukraine-Russian peace talks.