VOT Research Report
Analytics and Recommendations
Tuesday’s trading got off to a cautious start, with investors seemingly keeping an eye on the US midterm results and the inflation data on Thursday.
This week, it’s hard to see beyond these two things. Many people wonder if the impasse in Washington will be welcomed by investors .On the one hand, the prospect of cutting back on spending might be seen as helpful in the fight against inflation; on the other hand, the economy might be about to enter a recession, and the government’s inaction won’t help.
Biden’s economic agenda will be put on hold until after the 2024 election due to the Republicans’ strong odds of regaining control of the House and the Senate, which is currently divided.
How Trump-supporting Republicans fare in the midterms, particularly those who adhere so fervently to the “stolen election” line, will be arguably the most significant outcome. It would appear that Trump is about to throw his hat into the ring and declare any victories a show of support for his own nomination, as he is scheduled to make a “big announcement” soon.
Given that the United States is likely to enter a recession, the Republican candidate with the best chance of winning the election in 2024The extent to which Trump still controls the Republican Party and whether the manner of his departure will serve as a deterrent or a motivator for the base are now possible questions.
Of course, inflation is the most pressing issue right now, so despite the midterm results, the markets may still be nervous ahead of Thursday’s release. This data could either start to build the case for a lower terminal rate than the central bank hinted at last week or throw doubt on the Fed’s stated intention to slow the pace of tightening in December.
Oil loses ground as the number of COVID-19 cases in China rises. On Tuesday, oil prices fell a little after Brent crude came within a hair of $100 once more. Since July, it has been trading below this important psychological level, but recent events have pushed the price higher again, up more than 20% from the lows in September.
Although speculation regarding China’s zero-Covid commitment may have contributed to recent gains, OPEC+ played a significant role. However, these rumors have not yet been verified, and outbreaks in Guangzhou and other major cities have actually resulted in increased restrictions.
When you consider that any significant policy shift would be a significant departure from the status quo, it may be premature to speculate. Nonetheless, the performance of Chinese stocks suggests that there is a belief that there is smoke but no fire, which may also be allowing crude to continue rising.
Gold moves lower as the dollar strengthens The dollar is making a modest recovery around its recent lows, which is weighing on gold a little this week. After the jobs report late last week, the yellow metal shot up, but it eventually fell around $1,680, which had been a significant resistance level in the past. Nonetheless, it is holding onto the majority of those gains quite well, indicating that traders anticipate positive inflation data on Thursday, at least enough to convince the Fed to slow down its tightening pace next month.
Gold could get a boost from anything that suggests they won’t need to rise as much as the Fed said they would. However, considering what the central bank said last week, one has to wonder if they are actually expecting a stubborn reading once more.
Bitcoin drops below $20,000 After a rough few days, the cryptocurrency has fallen below $20,000 and is down more than 4% on the day. It has recuperated a brief time after already being off over 6% however this is a definitely more extreme decay than we’re seeing in other gamble resources which might be a stressing sign for crypto bulls. The declines may be related to the plunge in FTT, which was reported to have been caused by worries about Alameda’s balance sheet. Prices have been impacted in a similar manner in the past, which may account for this week’s sharper declines.
