FX.co ★ 27.09.2022: Wall Street indices enter bear market (S&P500, USD, CAD, Bitcoin).

27.09.2022: Wall Street indices enter bear market (S&P500, USD, CAD, Bitcoin).

Hi, dear traders! Our analysts are keeping you updated on macroeconomic data and their forecast for popular trading instruments. Here is a red-hot review of US markets. The trading week opened on a pessimistic note. During the highly volatile session, the Dow Jones entered the bear market. Earlier, the Nasdaq and the S&P 500 had already collapsed to the bearish territory. The Dows Jones lost 329 points to close at 1.11% on Monday. The Nasdaq shed a modest 0.6%. The S&P 500 was 1.03% down to close at 3,655. The New York pre-market looks promising on Tuesday. The benchmark stock indices perked up and traded higher. The S&P 500 is expected to trade in the intraday corridor between 3,640 and 4,790. Obviously, Wall Street got stuck in the bear market on Monday. The S&P 500 and the Nasdaq have been officially recorded on the bear market after they slumped 23% and 32% respectively. As for the Dow Jones, following a two-week losing streak, the index plunged 20.5% from the record high closing price on January 4. Amid the doom and gloom on Wall Street, analysts downgraded their forecasts of the S&P 500 gains for the third and fourth quarters and the whole of 2022. The aggregate profit of the S&P 500 is expected to grow only 4.6% in the third quarter, much lower than 11.1% in the previous forecast made in early July. Monday was not the worst day for the high-tech sector. Gains in Amazon and Costco shares kept the Nasdaq afloat despite another sell-off in the market. Apparently, a slump on Wall Street added volatility to other financial markets which are already affected by recession fears and the Fed’s hawkishness. As a result, the VIX index surged to a three-month high. A few Fed’s policymakers who spoke on Monday were indifferent to massive sell-offs in the stock market. Federal Reserve Bank of Chicago Charles Evans stated that the central bank has to raise interest rates at least by another percentage point this year. His colleagues also confirmed their commitment to the idea of curbing inflation to the 2% target, neglecting the havoc in the stock market. Wells Fargo predicts that the federal funds rate will be as high as 4.75 – 5.00% by the first quarter of 2023. Despite the headwinds, Wall Street is poised to regain losses. Apart from the benchmark indices, stocks of companies with mega capitalization such as Apple, Tesla, Amazon, and Meta traded in the green in the pre-market while Microsoft shares incurred some losses. Besides, shares of oil companies gained impetus amid a sharp rally in oil prices. Exxon and Chevron jumped 1.4% each. The macroeconomic data released today was rather promising. US durable goods orders slipped 0.2% on month in August following a 0.1% downtick in July. The consensus suggested a steeper decline of 0.4%. Later today, traders will get to know a consumer confidence index by the Conference Board. If the data comes in line with expectations, Wall Street will be able to close with gains today. While the equity market is regaining its footing, the currency market is adjusting the balance of trading forces. The US dollar is loosening its grip, retreating from historic highs. At the same time, other major currencies are gaining ground. Having dipped 0.2%, the US dollar index was trading at 113.8 at the time of recording the video. The intraday corridor for the index is seen between 113.2 and 114.2. The currency market owes its buzz to the hawkish rhetoric of central banks, soaring inflation, and geopolitical jitters. Forex traded with extreme volatility on Monday. The volatility index for G7 currencies by Deutsche Bank spiked to 13.55, the highest level in two and half years. No wonder, major currencies are trying to recover against the US dollar. The pound sterling climbed 0.5% to 1.0780 versus the greenback. The euro grew 0.26% to 0.9634. Each of the G10 currencies has fallen roughly by 16% against the US dollar this year. Further losses are yet to come. The Canadian dollar is also asserting strength against its American rival. The USD/CAD pair is now trading at 1.3688. The intraday corridor for the pair is defined between 1.3570 and 1.3690. High inflation is high on the agenda for the Bank of Canada.


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