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FX.co ★ 30.11.2022: What high-impact event can change trajectory on Wall Street?

30.11.2022: What high-impact event can change trajectory on Wall Street?

The final day of the autumn could be the turning point for Wall Street. The trading session today is jam-packed with a batch of macroeconomic data. The highlight of the week is a speech by Fed’s Chairman Jerome Powell. Now, let’s discuss recent events and forecasts by InstaForex analysts!

As expected, the benchmark stock indices closed yesterday mixed. Investors digested the news from China. Today they are sitting on the sidelines of a speech by the Fed’s leader. The Dow Jones closed almost flat with an uptick of 0.10%. The Nasdaq was not able to overcome pressure on the high-tech sector and closed 0.59% down. The S&P 500 regained its footing and climbed 0.16% to close at 3,957.

The three stock indices traded quietly in the New York pre-market. They went up in sync in the early American session. The intraday corridor for the S&P 500 is seen between 3,980 and 4,080 amid the fundamentals and bearing in mind a slew of macroeconomic data which could be market catalysts today.  

The culprit of pessimism in late Autumn is China. On the final days of November, investors cherish the hope that Beijing might relax COVID restrictions. China reported a lower number of new coronavirus cases and launched a massive vaccination campaign.

Today futures on Wall Street indices went up with the Nasdaq futures showing the strongest performance thanks to Tesla shares. The stock of the e-vehicles manufacturer jumped 1.4% in the pre-market because sales in November increased due to lower price tags on its Model 3 and Model Y cars.

The focal point today is a speech of the Fed’s Chair. Investors will be looking for clues to whether the Fed is poised to moderate the pace of rate hikes. Besides, the market is interested in Powell’s comments on the US current economic conditions.

Federal Reserve Bank of New York President John Williams said this week that interest rates would be lowered not until 2024.

Jerome Powell is expected to expand on long-term levels of interest rates. Recently, Fed policymakers brought up the issue of lifting the target inflation level by 2%.

Earlier this week, investors found out that the EU CPI slipped more than expected in November to 10% on year from 10.6% in October.

Jerome Powell is unlikely to contradict his colleagues and will cement market expectations for a softer monetary tightening. He could indicate the ultimate level at 5% or higher for the next year.

All in all, inflation seems to have passed its peak. Meanwhile, the labor market remains tense. Investors attach importance to Jerome Powell’s speech ahead of the government employment data which is due on Friday. On Wednesday, he got an idea of the employment in the private sector for November based on the ADP report and the closely monitored JOLTs job openings. The US private sector created 127,000 jobs in November, the smallest number since January 2021 and way lower than the consensus of 200,000 new jobs.

The weakest hiring was recorded in the construction sector and other sectors vulnerable to higher interest rates. In contrast, the consumer-focused sectors, including healthcare and hospitality sector, reported robust employment.The US dollar is extending its slide on Tuesday. Its index shed another 0.3% intraday to trade at 106.5. The index is expected to trade in the intraday corridor between 105.7 and 107.2. Apart from Powell’s speech, the US dollar is weighed down by the fresh ADP employment report. Earlier, the healthy labor market was the cornerstone of aggressive monetary tightening. In consequence, sluggish hiring may assure the US Fed to soften the pace of rate hikes. The US GDP data for the third quarter proves the resilience of the US economy.

The US economy expanded 2.9% sequentially in the third quarter, stronger than the first estimate of 2.6% and the forecast of 2.7%.

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*El análisis de mercado publicado aquí está destinado a aumentar su conocimiento, pero no a dar instrucciones sobre cómo realizar una operación
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