2022/11/30 (121) Technical Analysis – CBOT_MINI-YM1!

There Are 34000 Points To Defend In The DJI
– And Not Only This Week, But Rather Throughout December


Powell Confirms Slowdown In Rate Hikes Likely Next Month

The Federal Reserve may scale back the pace of its interest rate hikes already in December, Fed Chair Jerome Powell said on Wednesday in a speech at the Brookings Institution. “It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting”. Still, Powell added that “terminal rate,” is likely to be “somewhat higher” than the 4.6% indicated by in the September projections. The Federal Reserve raised the target range for the federal funds rate by 75bps to 3.75%-4% during its November 2022 meeting, marking a sixth consecutive rate hike and the fourth straight three-quarter point increase, pushing borrowing costs to a new high since 2008.

DXY Eases to Session Lows In Prospect Of Smaller Rate Hikes,
While US 10-Year Treasury Yield Consolidates Around 3.7% On Wednesday

The dollar index pulled back to session lows of 106.3 in a roller coaster session Wednesday, having risen above 107 earlier, after Fed Chair Powell confirmed smaller rate hikes could start already in December. The greenback turned positive earlier in the session after labour data was not enough to dash concerns about another 75 bps hike in December. Employment increased by 127,000 from October to November, the least since January 2021, and job openings declined to 10.3 million in October, suggesting demand for labor was cooling amid tight financial conditions.

The yield on the 10-year Treasury note consolidated around 3.7%, not far from an over 7-week low of 3.62% touched on November 28th as investors raised bets for a smaller size of rate increases from the Federal Reserve going forward. It comes after Fed Chair Jerome Powell said on Wednesday in remarks prepared for the speech at the Brookings Institution that the Federal Reserve may scale back the pace of its interest rate hikes already in December. Also, data suggested the labour market started to cool. Markets now see a 75% chance for a smaller 50 bps interest rate hike in December, after four consecutive 75 bps increases.Fed Chair Powell Triggers Bullish Price Action Rally Today

US Federal Reserve Chairman Jerome Powell gave US stocks a strong tailwind on Wednesday. The leading index Dow Jones Industrial rose by 2.18 percent to 34,589.77 points and reached its highest level in a good seven months. Among other things, Powell had suggested that December could be the time for more moderate rate hikes. The Fed had previously raised interest rates sharply by 0.75 percentage points. Shortly before Powell’s statement, the Dow was still in the red. Prices on the technology-heavy Nasdaq stock exchange rose even more sharply. The growth stocks listed there are considered to be particularly interest-dependent. Should interest rates rise less sharply, the chances of higher valuations for tech stocks on the Nasdaq increase. The Nasdaq 100 gained 4.58 percent to 12,030.06 points. But also in the Dow, three tech giants, Apple, Microsoft and Salesforce, were the biggest price beneficiaries. The market-wide S&P 500 increased by 3.09 percent to 4080.11 points.

“The time for a reduction in rate hikes could come as early as the December meeting,” said Fed Chairman Powell in Washington. Inflation, the main reason for interest rate hikes, had already weakened somewhat in recent months. Analyst Pablo Villanueva of UBS noted that Powell softened the wording on the interest rate peak, the expected peak in interest rates. With the gains of this Wednesday, the Dow has a respectable stock exchange month November behind it: The index went up by almost six percent – following an even stronger October. The Nasdaq 100 climbed similarly to the Dow in November. Boeing shares rose 2 percent. According to insiders, the aircraft manufacturer can hope for a compromise with the legislator when it comes to the endangered approval of two versions of the 737 Max jet. According to quarterly figures from Workday, shares jumped 12.6 percent. The provider of cloud-based accounting and human resources software has become a little more optimistic and has also announced a new share buyback program. On the other hand, the shares of Crowdstrike were penalized with minus almost 20 percent. The cyber security specialist disappointed with the sales target for the current quarter. The pharmaceutical companies Amgen, Janssen and Sanofi are currently negotiating a takeover with the Irish drug manufacturer Horizon Therapeutics. That helped the stock price rally nearly 27 percent. Horizon specializes in inflammation and rare diseases. Biogen’s papers benefited from new study data on the Alzheimer’s drug lecanemab, and became 4.7 percent more expensive. The drug, which was recently celebrated on the stock exchange as a possibly great success, showed positive results in clinical tests. However, deaths are also associated with the drug.

US Stocks Rally On Powell Remarks

US stocks rallied on Wednesday, after Fed Chair Jerome Powell hinted smaller rate hike may already come in December. “It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting,” Powell said in a speech at the Brookings Institution. The Dow Jones soared more than 700 points, reversing a 200-point loss; the S&P 500 gained 3.1% and the Nasdaq surged by 4.4%. Considering November, the Dow and S&P 500 advanced more than 4% while the Nasdaq gained around 3%. Meanwhile, data showed employment increased by 127,000 from October to November, the least since January 2021, and job openings declined to 10.3 million in October, suggesting demand for labor was cooling amid tight financial conditions.