2022/11/09 (107) Technical Analysis – XETR-BMW & 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…

Significant Losses – Burden US Midterm Elections
Independent Of That New US Inflation Data Will Come Out, On Thursday ! Will That Drive Us More Up/Down?

The Dow Jones Industrial crumbled slowly but steadily during trading on Wednesday and closed close to its daily low with a minus of 1.95 percent at 32,513.94 points. The market-wide S&P 500 lost 2.08 percent to 3748.57 points. The tech-heavy Nasdaq 100 fell 2.37 percent to 10,797.55 points.

US stock markets have gone into reverse after the recent rally. Stockbrokers attributed the clear losses to the first results of the US midterm elections, disappointing company figures and the recent turmoil in cryptocurrencies. Bitcoin fell below $17,000 for the first time since 2020.

The focus was on the intermediate elections, the so-called midterms. According to initial results, the Republican wave of success that was initially expected did not materialize. Attention will now turn to Thursday’s US inflation data, which investors are hoping will provide clues about the Federal Reserve’s monetary policy going forward. “Elections are important, but other factors are more important to markets and the economy,” said Keith Lerner, investment strategist at Truist Wealth.

The quarterly figures and the outlook from Walt Disney were very negative in the middle of the week. The papers fell by more than 13 percent and were thus the clear bottom of the Dow Jones index. The entertainment group groans under high costs. Disney’s streaming division made a quarterly loss of $1.5 billion. JPMorgan analyst Philip Cusick described the quarter as mixed overall, with the weaker margins of the amusement parks being painful. Meta shares, on the other hand, surged 5.2 percent as the top performer in the Nasdaq 100. The Facebook group is laying off more than 11,000 employees in the largest job cuts in its history. CEO Mark Zuckerberg emphasized the urgency of increasing efficiency. More attention needs to be paid to capital. China expanded corona restrictions in the district with Apple’s world’s largest iPhone factory. This could further impact iPhone shipments in the near future. Apple shares responded with a minus of 3.3 percent. The titles of the media group News Corp and the credit platform Upstart Holdings went down sharply, both according to quarterly figures. The former fell by 5.1 percent, the latter collapsed by more than 10 percent after clearly missing analyst estimates.
Nevertheless, you assume that the prices in the financial market will not be as volatile due to certain election results in the USA. The market, i.e. all of us who deal (in)directly with the financial market, regardless of whether we (do not) have certain open positions currently in the market, rather expect the upcoming US inflation data. And of course without ignoring the midterms. More on that when the result is certain, then from my side, in a 4XSetUp Scenario special. What does this mean for the US? For the US Democrats? For the US Republicans? And what are the consequences for the US financial market? For the price action for stocks, in New York? For the price action for the US yield curve, in Chicago?

Dollar Bounces Off Seven-Week Low And/Or US 10-Year Treasury Yield Consolidates Around 4.1%

The dollar index regained some ground above the 110 mark, recovering from a seven-week low of 109.4 in the previous session, as investors tracked the results of a tighter-than-expected contested midterm election. The odds are still favoring Republicans to win the US House, but the Senate control still hangs in the balance as a red wave expected by analysts did not materialize. Aside from politics, the primary catalyst for markets resides in the October CPI report due on Thursday, which will offer clues about the Federal Reserve’s rate path. Money markets are currently pricing a more moderate 50 basis point rate hike in December, but a hotter-than-anticipated inflation report could fuel bets for another supersized 75 basis point increase.

The US 10-year Treasury yield, the benchmark for borrowing costs worldwide, bottomed around 4.1%, not far from a 15-year peak of 4.3% reached in late October, as investors awaited the outcome of congressional midterm elections and inflation data due to be released later in the week. A slipt government, with Republicans winning the House of Representatives and possibly the Senate, could result in political gridlock that hampers significant reforms while boosting risk appetite. On the monetary side, 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.US Stocks Close About 2% Down

US stocks declined Wednesday, with the Dow falling over 600 points, the S&P 500 down 2.0% and the Nasdaq 2.4% on uncertainty about the outcome of the midterm elections that will set the agenda for the next Congress. Early results point to a tighter-than-expected race between Democrats and Republicans, with the odds still favoring the latter to control the US House while the Senate remains up for grabs. Investors also await the October inflation report due tomorrow for hints on how further the Fed may tighten financial conditions to cool an overheating economy. On the corporate side, shares of Disney dropped more than 13% after missing quarterly earnings and revenue estimates. Tesla was down 7% after filings revealed that Elon Musk sold nearly $4 billion in shares before his takeover of Twitter. On the other hand, Facebook-parent Meta rallied 5% after the social media giant announced that it would cut more than 11,000 jobs in the 1st round of layoffs.