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20.11.202214:05 Forex Analysis & Reviews: Stock market rally slowed down

Exchange Rates 20.11.2022 analysis

US and European stocks recovered from two days of losses, which was caused by the Fed's signal that interest rates could continue to rise for a while longer. But on the whole, the S&P 500 underperformed as it closed the week much lower than its opening price.

Exchange Rates 20.11.2022 analysis

The index rose 0.9%, a slight recovery from its 1% drop for the week. Nasdaq 100 increased by 1%.

At the premarket, shares of Applied Materials climbed 3.8% after posting a sales forecast that beat estimates. Many technology companies, including Nvidia, Meta Platforms and Amazon gained as well.

Exchange Rates 20.11.2022 analysis

As for the European stock index (STOXX Europe 600), there was a more than 1% increase, thanks to energy, banking and utilities. It is now on track to continue its four-week growth streak.

Exchange Rates 20.11.2022 analysis

The move came a day after stocks fell over hawkish comments from St. Louis Fed President James Bullard, who said interest rates needed to be raised to at least 5-5.25% so as to keep inflation in check. His comments prompted markets to raise their expectations of how high US rates might be.

Exchange Rates 20.11.2022 analysis

Unsurprisingly, dollar and Treasury yields rose after Bullard's comments. However, he is the only one that warned markets that while inflation appears to be easing from multi-year highs, more policy tightening is needed to tame price pressures. Some investors said the hawkish comments don't necessarily mean rates will reach higher levels than previously thought.

Nevertheless, there are growing fears that steadily rising rates will hit economic growth, and that the critical segment of the Treasury yield curve will be the most dramatically inverted in four decades. Copper and oil prices are even poised for weekly losses because of worries about a deteriorating demand outlook.

Exchange Rates 20.11.2022 analysis

Analysts at the Bank of America warned that because Fed policy may not change until June or July, higher rates and corporate earnings could be a headwind for stocks.

*Analisis pasar yang diposting disini dimaksudkan untuk meningkatkan pengetahuan Anda namun tidak untuk memberi instruksi trading.

Andrey Shevchenko,
Analytical expert of InstaSpot
© 2007-2024
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