2022/11/08 (106) Technical Analysis – XETR-BEI & CBOT

Our 4XsetUp Is Developing Better Than Originally Thought!
We`ll Let Every 4XSetUps Continue This Week Until The Weekend
– And Then Decide How Things Will Continue In DXY, UKOIL & GBPUSD Also…

US WallStreet Remain Confident At Start Of This Week
Independent Of That New US Inflation Data Will Come Out, On Thursday ! Will That Drive Us More Up/Down?

On the day of the midterm elections, the US stock markets continued their positive start to the week. The Dow Jones Industrial climbed to its highest level in two and a half months in trading on Tuesday and closed up 1.02 percent at 33,160.83 points. The market-wide S&P 500 gained 0.56 percent to 3828.11 points. The tech-heavy Nasdaq 100 gained 0.75 percent to 11,059.50 points.

The focus of interest was on the ‘midterm’ elections in the USA. In the middle of President Joe Biden’s term of office, decisions will be made about the majorities in both chambers of Congress – the Senate and the House of Representatives – as well as numerous governorships and other important offices. Biden’s Democrats are at risk of losing their majority in Congress, which would severely limit the president’s political leeway over the next two years. “Investors are buying ahead of what they believe will be a surefire Republican victory in both houses,” noted Zachary Hill, head of portfolio management at Horizon Investments. Among the individual stocks, Lyft, Take-Two Interactive and Tripadvisor in particular stood out with heavy price losses of between 14 and 23 percent. At the transport service provider, price target reductions rained down from analysts. In the case of the tourism portal, the weak quarterly outlook was particularly disappointing. The gaming software provider had trimmed its annual targets. Kohl’s shares rose 7.3 percent. The department store chain announced that CEO Michelle Gass will resign effective December 2. In addition, Kohl’s published first indications for the third quarter, which were better than expected by the market.

USA Trembling Towards The Outcome Of The Far-Reaching Midterm Elections

The United States is eagerly awaiting the outcome of the midterm elections that will decide the future power structure in Washington. At the “midterms” in the middle of President Joe Biden’s four-year term in office, a majority vote in Congress was held on Tuesday. All 435 seats in the House of Representatives and 35of the 100 seats in the Senate were up for election. Numerous governorships and other important offices in the states were also decided. The first polling stations were scheduled to close at 6 p.m. local time (midnight CET). Biden’s Democrats are at risk of losing their majority in Congress, which would severely limit the president’s political leeway. According to polls, the Republicans have a good chance of taking over the majority in the House of Representatives. Head-to-head races for several seats were expected in the Senate, which is currently tightly controlled by the Democrats. If the Republicans take control of Congress, the second half of Biden’s term in office is likely to be characterized by deadlock, the inability to reform, and partisan struggles. Biden called on voters to vote on Tuesday. Starting with states like Vermont, Connecticut and New York in the east of the country, polling stations across the country gradually opened up. The USA spans several time zones. The last polling stations in the far west should close on German Wednesday morning – first meaningful results were expected.

Dollar Fails to Hold Gains And/Or US 10-Year Treasury Approches 15-Year High

The dollar index weakened toward the 110 mark, moving away from its daily highs of 111.3, with investors seeking new signals for future rate hikes. Last week wrapped up with a hawkish message from the Federal Reserve warning about a longer monetary tightening path and a mixed US jobs report showing strong hiring and wage increases along with higher unemployment. Now, all eyes turn to October CPI data, due on Thursday, for hints on how much further the US central bank may tighten financial conditions as it seeks to cool an overheating economy. Markets are betting that the Fed will hike rates by 50 basis points in December after delivering four successive 75 basis point rate increases. The most pronounced selling activity was against the British pound amid expectations of tighter financial conditions as the UK inflation rate hit a 40-year high and fiscal uncertainty continued.

The US 10-year Treasury yield, the benchmark for borrowing costs worldwide, consolidated around 4.1%, not far from a 15-year peak of 4.3% reached in late October, as worries about inflation and aggressive Fed tightening spook investors. The Federal Reserve delivered a widely expected 75 bps hike last week while flagging a longer monetary tightening path as the central bank seeks to bring down inflation to its 2% target. While recent data showed that the job market remains extremely tight, now, all eyes turn to October inflation data, due on Thursday, for more clues on future interest rate hikes. Meantime, Germany’s 10-year Bund yield, the European benchmark, rose to as high as 2.3%, closing in on its highest level since August 2011.

US Stocks Push HigherUnited States Stock Market

The Dow gained nearly 400 points on Monday, while the S&P 500 and Nasdaq added about 1% as investor focus turned to the latest inflation report and the midterm elections later this week. With the Federal Reserve hinting at a slowdown in the pace of monetary tightening later this year but warning about a higher terminal rate, investors now await October CPI data, due on Thursday, for clear insight regarding the central bank’s rate path. The market movement came on the heels of a mixed US nonfarm payroll report for October that showed that the world’s largest economy created more new jobs than expected while wages continued to increase although the unemployment rate climbed. On the corporate side, Facebook-parent Meta jumped more than 6% despite saying it plans to begin large-scale layoffs this week.