XAG/USD Traders Await FOMC’s Dovish PivotXAG/USD Traders Await FOMC's Dovish Pivot
Dollar beaten to over two-month low as Fed cut bets take charge By ReutersDollar beaten to over two-month low as Fed cut bets take charge By Reuters

The year
2023 hasn’t been smooth for markets (and all of us, honestly). We’ve heard many
experts’ concerns about the poor outlook for shares, and it seems that stock
indices have mostly declined. However, the reality is that the S&P 500, the
Nasdaq, and the Dow Jones are headed towards their peaks for the year, with
particularly strong growth in November. Let’s explore the new factors
influencing this situation and draw some conclusions.

chart below illustrates how the main US stock indices have changed since the
beginning of this November. Step by step, they have shown impressive dynamics.
If you’re interested in which specific stocks are performing the best today,
you can check this list of the biggest gainers of the day.

The YtD
chart reminds us that before November, the markets didn’t seem very stable,
experiencing a prolonged decline starting in the second half of the summer.
Despite talks of a market bubble during this period, they weathered the
instability and approached figures close to the year’s maximum.

without discussions about the year’s highs, there are other achievements – just
take a look at the current growth. More than a 45% increase for the Nasdaq
index is substantial, and over a 17% rise for the S&P 500 is quite
commendable as well. However, these significant numbers are largely
attributable to the last few weeks. So, what exactly happened?

At the
beginning of the month, the Fed’s meeting had a positive impact on stocks. The interest rate remained unchanged, and market
participants got confirmation that the regulator wasn’t planning to increase it
at the next event either.

second supportive element for indices was credible reports from tech companies.
Investors were generally pleased with the results they observed.

The last
significant factor was the inflation data. Consumer prices for October turned
out to be lower than expected, with the inflation rate slowing to 3.2%. A
decline in price pressure gives the Fed fewer reasons to raise the interest rate.
Therefore, the USD and US bonds become less attractive, and the stock market
might draw more attention. In other words, the importance of risky assets has

such news, many experts have raised the probability of the first decline in the
interest rate in May 2024. The initiation of the decreasing key rate cycle by
the Fed could bring about multiple changes in the stock market and Forex, you
can imagine. However, can we be certain that it will happen in May? Probably
not. That’s why it’s crucial to conduct your own research before making any
trade decisions.

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