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08.11.202209:04 Форекс анализи и прегледи: US stock market ahead of midterm election

Exchange Rates 08.11.2022 analysis

S&P 500

Outlook on November 8th

Election day.

The US stock market is scoring gains ahead of the election.

On Monday, the main US indices went north, with the Dow adding 1.3% and the S&P 500 gaining 1%.

S&P500: 3,807; 3,750-3,860 range.

Elon Musk called on to vote for the Republicans on the eve of the election. Most polls show that the Republicans will probably gain control over the House of Representatives. Judging by the stock market's reaction yesterday, it welcomed such a possibility. Perhaps the market hopes that if the GOP wins the election, business conditions will improve, taxes will be lower, and the pace of tightening will slow in the coming months.

The US dollar index fell by 1.8% on Friday and dropped by another 0.7%, to 110.16, yesterday.

The stock market was resilient to selling pressure yesterday, which came as a positive factor. Additional support came from speculation that China might ease its zero Covid policy in the near term and that the mid-term election might lead to a deadlock, making it almost impossible to pass any new tax increases or major spending plans.

Most S&P 500 sectors closed higher with communication services (+1.8%) leading the way, boosted by Meta Platforms' growth (META 96.72, +5.93, +6.5%), following The Wall Street Journal report that the company was planning mass layoffs to cut Meta's costs.

Norwegian Cruise Line (NCLH), Perrigo (PRGO), Expeditors Intl (EXPD), Constellation Energy (CEG), DuPont (DD), GlobalFoundries (GFS), Squarespace (SQSP), and Coty (COTY) are set to report their earnings on Tuesday.

The NFIB Small Business Optimism Index (previous: 92.1) will be released on Tuesday.

Consumer borrowing in September increased by $25 billion, down from a revised $30.1 billion gain in August.

Energy: crude prices are on the rise with Brent trading at $97.60 per barrel. Resistance is seen at $100 per barrel.

The European Union has already spent €200 billion to overcome the energy crisis. The European Commission sees the EU economy expanding by the end of 2023 despite a recession in the coming quarters.

Global airline industry: passenger traffic is up by 57% globally this year. The industry is recovering from the pandemic, but air cargo operations are down by 10%.

Industrial production in Germany grew by 0.6% in September, beating market expectations.

Final thoughts: markets are awaiting the result of the US midterm election and may show further growth.

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