Inching higher, stocks are building on Friday’s gains. The midterm elections tomorrow can act as an upward impetus for stocks.
US futures Today:
Dow futures +0.2% at 32486
S&P futures +0.2% at 3775
Nasdaq futures +0.2% at 10883
Europe
FTSE -0.47% at 7142
Dax +0.51% at 13407
Midterm stalemate may be a good thing.
In anticipation of tomorrow’s midterm elections and as research has highlighted to analyse Friday’s financial results, US futures are gaining.
The US NFP revealed that overall job growth was strong. The market, though, focused on a larger-than-expected increase in employment and a slowing rate of inflation in wage increases. Following the release of the NFP report, the markets revised their expectations for the Fed to raise interest rates in December to a 56.8% likelihood of a 50-bps increase and a 43.5% likelihood of a 75-bps increase.
There are no highly significant US data sets to be released today. The focus will instead be on Fed speakers who might provide greater insight into what to anticipate from the Fed in upcoming sessions.
Also gaining attention are tomorrow’s midterm elections. It is anticipated that the Republicans will outperform the Democrats. Political deadlock, which historically has been good for equities, will be anticipated over the following two years should Republicans regain control of the House and perhaps even the Senate.
Business news
After announcing that it will ship fewer iPhones due to a COVID breakout at the Foxconn manufacturing facility in China, Apple is experiencing pre-market losses.
On news that the social network business would begin to announce a major reduction in headcount, Meta is climbing. This week, layoffs are anticipated to begin.
Where will the Dow Jones go after that?
The Dow Jones is moving upward after recovering from 31750; it is aiming towards 33,000, the high from last week, the round figure, and the resistance of the descending trendline. The 20 sma has crossed above the 50 sma, and the RSI is over 50, giving buyers hope for more upward movement. Before turning their attention to 33460, the high from August 26, buyers will wait for a gain over 33,000 to establish a higher high. In order to expose the 20 sma at 31300 and the 50 sma at 30850, sellers will watch for a move below 317100.
Forex markets: USD declines, GBP rises
As investors revalue prospects of a Federal Reserve rate hike, the USD is declining. Since the NFP, which caused the USD to decline, expectations of a 50-basis point increase in December have increased.
After suffering significant losses the previous week, the GBPUSD is again gaining thanks to an uptick in investor sentiment. The pound is able to ignore information indicating that house values dropped at the fastest rate since February 2021 and a Deloitte survey indicating that 6 in 10 Britons want to spend less on Christmas this year than they did last year.
GBP/USD +0.72% at 1.1456
EUR/USD +0.2% at 0.9980
Over $90 per barrel of oil remains steady.
As investors take in the most recent developments from China, the world’s largest crude importer, which are balancing off softening Fed rise expectations in the US, oil prices are consolidating and are currently hanging around $90 per barrel.
China’s trade surplus figures were dismal, illustrating the decline in both international and domestic demand. Beijing also reiterated its commitment to its zero-COVID policy out over weekend. This policy has thus far this year hurt China’s economy. The likelihood that this policy will remain in place is a hindrance to the outlook for oil demand.
The market is also factoring in a slower rate hike schedule from the Fed, which is pushing risk assets up and the USD weaker.
