Investors in US stock markets continue to roll over every comment from a Fed member for clues about the next rate hike. But the most recent sentences are not trend-setting. And so the indices are treading water or set back slightly once more.
The US stock exchanges continued their downward slide and closed again at a discount. As has been the case for days, the focus has been on US interest rate policy. The Dow Jones index closed almost unchanged at 33,547 points. The S
After hopes that the US Federal Reserve would take a somewhat more moderate stance with the forthcoming interest rate hikes had recently driven the markets, statements by Fed members have now caused some disillusionment. They are in favor of higher interest rates than previously expected by the market. Traders also pointed out that yesterday's better-than-expected US retail data had sparked fresh inflation concerns, with fears that the US Federal Reserve could resolutely raise interest rates again.
In terms of the economy, the Philadelphia Fed Index for November was significantly worse than expected. The number of weekly initial claims for US unemployment insurance benefits has decreased. Housing starts fell slightly more than expected in October, while the decline in building permits was less pronounced than forecast.
On the foreign exchange market, the dollar recovered somewhat from the recent drop. The dollar index was up 0.4 percent. The dollar's rally this year is likely to reverse in 2023 when the Federal Reserve's rate-hiking cycle comes to an end, analysts at HSBC said. Some of the dollar's safe haven appeal may wane if the Federal Reserve pauses in tightening monetary policy. However, global growth will remain sluggish for some time, US yield levels are attractive and vulnerabilities in other countries remain high.
Oil prices again showed significant discounts. Brent prices fell 3.3 percent and WTI prices fell 4.2 percent. Concerns about demand from China continue to weigh on prices, according to Peak Trading Research. Other participants referred to recession concerns.
On the bond market, US yields are now up again after the strong drop of the previous day. Volatility is likely to remain high as investors try to anticipate how far Fed interest rates will rise and at what pace, one observer said.
The network equipment supplier Cisco Systems increased sales more than expected in its first quarter of 2022/23. The outlook for the full year has been raised. The stock gained 5.0 percent. Nvidia's titles fell 1.5 percent. Although the developer of graphics processors missed the market's earnings estimates in the third quarter, it did better than expected in terms of sales.
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