FX.co ★ US Premarket on December 29: investors are trying to end the year on a positive note

As technology companies attempted to show a rally on the penultimate trading day of the year, as if leaving a difficult year behind for financial markets, futures on US stock indexes rose on Thursday.

As a result of the increase in Asian technology stocks, futures contracts for the high-tech Nasdaq 100 increased by more than 0.6%. The news that China is easing regulatory restrictions caused a reaction in the markets. The S&P 500 futures contracts increased by about 0.3%.

Tesla Inc. shares, which have recently displayed high volatility, increased by more than 3% in the premarket, while other tech behemoths like Amazon.com Inc. and Netflix Inc. also gained a significant amount of weight. The dollar index fell while the Treasury bond market remained steady.

As mentioned above, the rally in technology companies was a meager ray of hope at the end of this year, and investors will once again need to pay attention to the dangers posed by the spread of COVID-19 and high-interest rates in the following year. The US government has already announced that it will demand that travelers entering the country from China take the COVID-19 test. Following the discovery of coronavirus in nearly half of the passengers on two flights from China to Milan, health officials in Italy announced that they would monitor arrivals from China.

Permit me to remind you that Hong Kong lifted restrictions on large-scale public gatherings and traveler screening as a result of the relaxation of coronavirus restrictions. This boosted the world economy, but it also sparked concerns that this would increase inflationary pressure and motivate US politicians to maintain strict monetary policy conditions.

Given this context, it is clear that investors in 2023 will continue to be wary of risky investments and gear up for more rate hikes as well as an inevitable recession. The main issue is how difficult the economy's recovery will be.

The Stoxx Europe 600 index recovered losses after the decline and traded close to the day's opening level as the rise in technology stocks more than offset the decline in stocks with a retail and consumer focus.

Regarding the reports from yesterday, which put pressure on the indices, it is clear that the Federal Reserve System's aggressive policy of tightening continues to have a detrimental impact on the housing market. According to the report, pending home sales in the United States dropped to their lowest level ever in November for the sixth consecutive month. The costs associated with borrowing have nearly doubled since the beginning of the year.

As investors considered the ramifications of the Russian ban on exports to buyers who adhere to the price limit, oil fell due to low liquidity in other markets.

According to the S&P 500's technical picture, the index might keep expanding. Returning to the level of $3,806 will be a priority for today to accomplish this. Only then can we anticipate a stronger upward spike that will strengthen the trading instrument to $3,866 and $3,891. The $3,923 level is a little higher; it will be challenging to surpass it. In the event of a downward movement, buyers need only declare themselves around $3,773, which is almost the lowest point from last week, after which the index will come under more pressure. The trading instrument's closest target is the $3,699 region, and the breakdown will quickly push it to $3,735.