The legend in the InstaSpot team!
Legend! You think that's bombastic rhetoric? But how should we call a man, who became the first Asian to win the junior world chess championship at 18 and who became the first Indian Grandmaster at 19? That was the start of a hard path to the World Champion title for Viswanathan Anand, the man who became a part of history of chess forever. Now one more legend in the InstaSpot team!
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Investors took the lawsuit against Jerome Powell in stride, allowing the S&P 500 to hit a new record high
Fear is often exaggerated. Concerns that the suit could ignite a renewed "sell America" trade over threats to Fed independence—if the central bank, at the White House's behest, began aggressively loosening policy, leading to runaway inflation and a double?dip recession—did not materialize in market panic. In practice, the broad index reacted fairly calmly to the threat.
The Fed's independence remains sacrosanct for equity markets. Investors understand that several months remain before Jerome Powell would leave the Fed chairmanship. The suit against him matters less than the court verdict in the Lisa Cook case on January 21. If the White House succeeds in removing the FOMC governor, it would set a precedent. Donald Trump's chances of flooding the Committee with "doves" would rise, along with the probability of aggressive federal funds rate cuts.
Dynamics of US Stock Indices
Former Fed chairs backed Jerome Powell. Alan Greenspan, Ben Bernanke, and Janet Yellen warned that White House intervention in monetary policy would end badly. Experience in other, mainly emerging, economies proves the point: Argentina, Turkey, and many others tried fiscal dominance and ended up ruined. Their economies were shaken by sky?high inflation and currency crises.
Markets do not believe this could happen in the United States. The Fed is not a one?man show, and decisions are made collectively. Moreover, attacks on Powell could backfire. After his term as chair expires, he could remain on the FOMC, as the law allows.
According to JP Morgan, investors are not easily frightened. Any escalation of conflict between the White House and the Fed, the bank says, is a good excuse to buy the S&P 500 on a pullback. Small?caps look even better at the start of the year.
Russell 2000 Lead Days vs S&P 500
Russell 2000 has outperformed the broad index for seven consecutive days, something not seen since early 2019. Then the US market was recovering from late?2018 sell?offs. Today, rotation is in full swing. Investors are shedding mega?cap tech names and buying sectors sensitive to the health of the US economy.
The market is preparing for the release of December inflation data in the US, which will clarify the Fed's stance.
Technically, the daily chart shows that the S&P 500 continues an uphill march. Long positions opened at 6,931 and below should be held and occasionally increased. As long as the broad index trades above fair value at 6,900, sentiment remains bullish.
*এখানে পোস্ট করা মার্কেট বিশ্লেষণ আপনার সচেতনতা বৃদ্ধির জন্য প্রদান করা হয়, ট্রেড করার নির্দেশনা প্রদানের জন্য প্রদান করা হয় না।
ইন্সটাফরেক্স বিশ্লেষণমূলক পর্যালোচনাগুলো আপনাকে মার্কেট প্রবণতা সম্পর্কে পুরোপুরি সচেতন করবে! ইন্সটাফরেক্সের একজন গ্রাহক হওয়ায়, দক্ষ ট্রেডিং এর জন্য আপনাকে অনেক সেবা বিনামূল্যে প্রদান করা হয়।
