The market’s latest news shows that marketers and the Federal Reserve are not on the same page, and interest rate hikes are the main conflict.
Wall Street’s major indexes opened higher on Friday despite rising interest rate concerns. Currently, the main market news will be the increasing number of COVID cases in China and its “zero COVID” policy.
Back to today’s numbers in wall street, the S&P 500 jumped by 0,59%, the Nasdaq features climbed by 1%, and Dow Jones added 0,3% gains. Nasdaq-listed stocks delivered above-average gains in the pre-market. Tesla shares rose by 2% after announcing that its self-driving software beta will be available in North America. Coinbase stocks jumped by 1%; Amazon shares rose by 1%; however, Apple shares set a 0.9% decline in their prices. The “Zero Covid” policy in China is still affecting tech stocks and the global stock market in general. Although the country hasn’t yet conducted any city lockdowns, there could be more damage if it happens.
During the COVID lockdowns, the global supply chain took a lethal hit, and the economy is still feeling its long-term effects.
This week, it seems that the volatility level has declined a bit due to last week’s positive data. Nonetheless, FED officials remain steadfast in their desire to raise the central bank’s interest rate.
As for the commodity market, today has seen an increase in Brent and WTI oil prices. The West Texas Intermediate crude oil price in the United States increased by 0.51% to $78,34 per barrel. Brent oil rose by 0.14 percent to $85 per barrel, while natural gas prices fell to $7.1 per gallon. As for the bond market, it’s clear that the market still lies between two short-term trends: a rising moving average and a declining moving average.
So far, it’s unclear how much the FED officials will raise their interest rates in the next meeting. Marketers and top investors are getting upset with the Federal Reserve’s extreme hikes, which are more likely to cause a massive decline in the next several weeks. Many things have changed since the last CPI report, one of which is the restrictive monetary policy. Since September, FED officials, including the chairman, have confirmed that their policy will be restrictive.
Yet according to the past few weeks’ data, the vast majority agree that inflation has peaked and it’s time to act less aggressively. October’s consumer product price index recorded a 7.7% year-over-year increase. Meanwhile, the core PCE is expected to increase log-in by 6% year over year in November, and the CPI is more likely to fall by the end of the month.
One of the main reasons why the FED persists in maintaining its higher interest rate is the support that these hikes give the USD. However, it seems that the USD is losing its confidence against the Euro, and some analysis estimates that the currency will fall by a record number in 2023.
However, the FED’s official restrictive monetary policy has raised the market’s level of uncertainty to the unknown. meaning any downturn in the next several weeks might lead to a short-term recession.