Nasdaq, growth, interest… In recent rate hike stories, when swap traders priced higher interest rates in anticipation of the aggressive Fed, the main burden of the market was placed on the technology side, naturally on the Nasdaq. While Netflix's weak balance sheet performance, Tesla and Twitter specific ownership and partnership stories, important technology balance sheets will be followed throughout the week. Google and Meta will announce their balance sheets on April 27, and Apple and Amazon on April 28.

Nasdaq – S&P 500 vs US 5y5y Inf Break-even… Source: Bloomberg

Sharp correction effect… As inflation expectations accelerate, there is also the expectation of higher interest rates. Considering that the Fed's rate hike by 75 bps is now mentioned, it would not be a surprise if inflation, which is not under control, triggers such speculations and brings new pricing. Powell's rhetoric, which left the door open for a series of 50 bps rate hikes, opened a new era and we see that the dollar/UST yield dominance in today's pricing is on top. If the risk free rate assumptions are to rise, they will not be positively reflected in stocks, especially in technology.

Conclusion? How much more Fed expectations will load will be decisive. As we enter the blackout period before the May 4 FOMC, the CPI data to be announced this week will underline the Fed's 50 bps rate hike phenomenon. At the epicenter of an inflationary margin concern, the discomfort is indeed widespread, but technology will be more critical when financial sensitivity comes into play. The Fed will begin to tighten with a 50 basis point rate hike and if there is a signal about what to do in June or July, we will see a clear picture.

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