Market Analytics and Technical Considerations
Key Points
December S&P 500 prospects (ESZ22) are moving up +0.02% toward the beginning of today after three significant US benchmark files scored strong increases on Wednesday as financial backers diverted hopeful after minutes from the most recent Central bank meeting uncovered that policymakers expected an easing back of rate climbs soon. Gains in the Consumer Goods, Technology, and Utilities sectors were the primary drivers of the three major stock indexes in the United States.
In preparation for the Thanksgiving holiday, the stock market in the United States will be open for a half-session today. After the minutes showed that a “substantial majority” of Fed policymakers agreed that it would “likely soon be appropriate” to slow the pace of interest rate hikes, three major US benchmark indices closed in the green on Wednesday.
However, Donovan stated that there was still no indication of a genuine halt, and other Fed members believed that rates might have to rise somewhat higher than anticipated.
UBS Chief Economist Paul Donovan stated, The Federal Reserve minutes signaled that some sensible voices are trying to drown out Fed Chair Powell’s relentless ‘hike, hike, hike’ chant.
U.S. rate futures have priced in a 75.8 percent chance of a 50 basis point rate increase and a 24.2% chance of a 75 basis point rate increase at the monetary policy meeting in December following the release of the Fed minutes.
In addition, data from the U.S. Labor Department showed on Wednesday that jobless claims increased more than anticipated last week and that business activity in the United States decreased for the fifth month in a row in November, indicating that the economy is slowing.
Friday’s economic data slate is devoid of anything.
Everyone’s eyes one week from now will be on the U.S. CB Buyer Certainty, ADP Nonfarm Business Change, ISM Assembling PMI, and Nonfarm Payrolls information. Investors will also be keeping an eye on the U.S. GDP in the third quarter, JOLTs job openings, pending home sales, crude oil inventories, PCE Price Index, Unemployment Rate, and Personal Spending data.
Rates on 10-year bonds in the United States currently stand at 3.707%, a decrease of -0.05%.
As market participants digest Germany’s GDP and consumer confidence data, the Euro Stoxx 50 futures are down -0.28% this morning in thin trading conditions. Additionally, investors are likely to focus on the speech by ECB vice president Luis de Guindos, which comes a day after meeting minutes revealed that policymakers feared inflation might become entrenched, necessitating further rate increases.
According to the meeting minutes, It was also clear that rates would need to be raised further to reach a level that would deliver on the ECB’s 2% medium-term target
Today, data on Germany’s GDP, GfK consumer climate, consumer confidence in France, and consumer confidence in Italy were made public.
Compared to expectations of +0.3% q/q and +1.1% y/y, the German third-quarter GDP was reported at +0.4% q/q and +1.2% y/y. As a result of consumer spending, this indicates a modest improvement from the previous quarter.
The German GfK Consumer Climate in December came in at -40.2, which was lower than the expectations of -39.6.
Expectations were met when the French consumer confidence index for November came in at 83.
The November Consumer Confidence Index in Italy was 98.1, exceeding expectations of 91.0.
Today’s trading on Asian stock markets was mixed. China’s Shanghai Composite Record (SHCOMP) quit for the day, and Japan’s Nikkei 225 Stock File (NIK) shut down – 0.35%.
As a result of dovish signals from the Federal Reserve, a wider appetite for risk-driven assets was bolstered, and today, the Shanghai Composite closed higher in China. At the same time, on Thursday, 32,695 new COVID-19 infections were reported, a record high for the nation.
Furthermore, China forced new lockdowns in a few significant urban communities, including Beijing, Shanghai, and Guangzhou, and requested mass testing. Because of this, investors are concerned that the country’s economic expansion would be hampered once more by new lockdown measures.
The hotter-than-anticipated inflation report in the nation’s capital led to a lower closing for Japan’s Nikkei 225 Stock Index. This resulted in additional economic obstacles for the nation. The Power, Shipbuilding, and Communication sectors’ losses fueled the index’s downward momentum.T he implied volatility of Nikkei 225 options is taken into account in the Nikkei Volatility, which closed at a 52-week low of 17.15.
