Current strategy: reasonable pessimism

#NIKK225

Key zone: 42,400 -43,400

Buy: 43,200 (after a strong breakdown of 43,000); target 45,000; StopLoss 42,700

Sell: 42,000 (on a strong negative foundation); target 40,500; StopLoss 42,500

Trading on global markets remains extremely restrained. The S&P 500 and Nasdaq 100 indices showed almost no change, yet overall sentiment remains cautious under the influence of mixed corporate reports and expectations of a possible Fed rate cut in September. The Dow Jones is trying to correct, while the other indices move near key support zones.

European exchanges closed the session with moderate growth:

• Stoxx 600 +0.3%
• DAX +0.2%
• CAC 40 +0.6%
• FTSE 100 +0.24%

The rise was mainly supported by the geopolitical backdrop — cautious but problematic optimism around the Ukraine conflict. At the same time, the UK has no internal factors for upward movement, making the probability of correction in the FTSE 100 simply unavoidable.

Asian markets look weaker. The Nikkei 225 lost 1.5% after reaching record highs last week, while the Topix fell 0.57%. The main pressure came from the technology sector and falling exports.

Trade balance data only strengthened the negative:

• Japan’s exports in July fell 2.6% y/y — the largest decline in four years,
• the main factor was lower US demand amid Trump’s new tariffs,
• imports fell 7.5% y/y (better than the forecast of -10.4%), but this is already the fourth drop this year.

Thus, the financial stability cushion for the yen continues to shrink. The ability of the Nikkei 225 to hold the support zone will determine whether there is potential for a rally or if the market will slide into a deeper correction.

Investors are focused on Jerome Powell’s upcoming speech, which may be his last at this symposium as Fed Chair. The market expects Powell to speculate on the independence of the regulator and prepare the ground for a possible 0.25% rate cut in September.

Economic signals remain contradictory, and the further dynamics of US equities will largely be determined by Powell’s comments, retail sales reports, and the evolution of US trade policy.

So we act wisely and avoid unnecessary risks.

Profits to y’all!