VOT Research Desk

Market Analytics and Considerations

The Points to note:

EQUITY INFORMATION AND ANALYSIS FOR THE US

Markets on fear as China’s infection rate near its peak (April 2022)

S&P 500 centralizes around with a crucial zone of support while looking for the next move in that direction.

Positive US Q4 GDP report rekindles talk of a “smooth transition,”

Fundamental Landscape

26,824 new Covid instances were reported in China on Sunday, according to reports, which has alerted local authorities and money markets. Multiple arc have been documented in Beijing, Guangzhou, and Chongquing in the southwest, as well as in Zhengzhou, where Apple’s Foxconn facility is located.

The US 10 year yield and the US dollar are on the rise, but oil trades flat, suggesting that the market reaction is currently quite restrained. Stocks partially rebounded after dimpling downward at the opening. China’s more focused implementation of its Zero Covid policy, which was reiterated following China’s national congress, is currently being put to the test as the newest infection rate is rapidly nearing the nation’s record of almost 29,000 new infections per day in April 2022. An increase in occasional infections poses a serious danger to the current bullish gain witnessed in US as well as European equities indices because China is such a crucial component of global trade.

Technical analysis of the S&P 500: Key Region into Action

Technically, the S&P 500 index is still in its longer-term decline while also being within its intermediate upswing. Prices are still below both the 200-day simple moving average and the long-term declining trendline (SMA). Therefore, the immediate zone of support near 3950 and the waning bullish impetus both continue to be crucial for future directional swings.

        Daily SMA

The 3950 stage corresponds to the peak levels from February and March, and more lately, it restrained bullish vigor in June and October. The region is acting as support right now, and a recovery below 3950 with continuation moves the index toward the 200 SMA and the significant falling trendline. The January 2021 top of 3860, which also serves as the trendline support linking the higher lows of the bullish run, is highlighted by a breach below 3950. Additional levels of support can be seen at the 38.2% and 23.6% Fibonacci retracements of the significant 2020 rise, respectively.

Candlestick Pattern

Candle Time Nov 21, 2022 11:00AM 1 Candles Ago

Indication Down trend reversal

Reliability High \s Description The addition of this pattern to the common Engulfing structure is more credible.

Within the first two candles, a bearish engulfing pattern can be seen.

A black candle with a lower proximity than the 2nd candle makes up the third candle.

The bearish trend reversal is reinforced by the third candlestick.

US GDP Maintains the Possibility of a “Smooth Landing”

After two quarters of shrinkage in the first half of the year, the US GDP for the third quarter surprised to the upside, coming in at 2.6% in its first estimate. Using its own “GDPNow” tool, the Atlanta Fed forecasts the GDP for the current quarter, and as of November 17, it predicts an outstanding 4.2% increase in Gnp. The data should only be taken as a guide, but it clearly paints a positive image for US stocks given that the jobless rate is still only 3.7%.

Source: Atlanta Fed, GDPNow

Notwithstanding that a much decline in inflation in October, Fed policy and ensuing inflation prints continue to be key drivers of US equities. The Fed has reiterated that “credible evidence” of slowing inflation is required before considering a change in approach. Dovish members of the Fed have undoubtedly contributed to the recent rise in equities along with the lower inflation print, but it is unclear whether the US has seen an inflation peak.

This week’s economic calendar is rather light, but market investors will examine the FOMC minutes of meeting from November to look for any hints about the timing of raising rates in the future.