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Stock Markets in Hibernation Before the FED

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Stock Markets in Hibernation Before the FED

Introduction

This article was posted on Wednesday, 17:10, UTC.

Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2476 0.07%
DAX 12303 0.32%
WTI Crude Oil 48.66 1.61%
GOLD 1248.00 -0.32%
Bitcoin 2475 -4.13%
EUR/USD 1.1627 -0.17%

The Fed-day is here once again, and markets are behaving in the usual way, with stock markets being stuck in a low-volume swamp, and volatility being back near its all-time low. Although there are no major expectations regarding today’s announcement, the recent decline in the Dollar, and the retreat in treasury yields gives room for the central bank to apply some “verbal tightening”. As the major US indices are at or near all-time highs there is certainly a chance to normalize rates once again, despite the not-so-stellar economic numbers.

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The Dollar Index is oversold, but still under pressure, 4-Hour Chart Analysis

The NASDAQ is in the driving seat once again today, hitting yet another new all-time high amid the intensifying earnings season. Thursday will be a blockbuster in European earnings as well, so things will get exciting in the back part of the week for sure. So far, earnings were a tad on the bullish side, but investors mostly shrugged profits, sales, and margins alike, as central banks remain the most important factor for the markets after more than 5-years of “extremely easy” policies. Boeing (BA) and AT&T (T) were among the best-performing companies since yesterday, propelling the benchmarks to new highs today.

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Currencies are mixed and choppy with only the Swiss Franc losing ground for the second day in a row after the Swissie lost the crucial 1.10 level against the Euro. Commodities are more active, with oil being volatile amid the conflicting news regarding the trends in global supply. Gold is still slightly bearish before the Federal Reserve’s meeting, consolidating its recent gains below the $1250 level

EUR/CHF Daily Chart Analysis

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Cryptocurrencies

The crypto market is still stuck in a correction, as regulatory woes, the Bitcoin Cash fork attempt, and the prior short-term overbought momentum readings all contribute to the decline. While the long-term picture is still constructive, the current dip could still last, with some of the majors like ETH and Ripple still being inside declining trends. Small cap coins have rebounded off yesterday’s lows, while Ethereum refused to stay below $200 sustainably, also showing short-term relative strength. Dash remains the strongest major, trading near $200, a bit more than 10% off its all-time high.

Ethereum, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA CPI Index 0.2% 0.4% 0.5%
10:30 UK GDP 0.3% 0.3% 0.2%
16:00 US New Home Sales 610,000 615,000 610,000
16:30 US Crude Oil Inventories -7.2 mill -3.3 mill -4.7 mill
20:00 US FOMC Rate Decision 1.25% 1.25%
20:00 US Fed Monetary Statement

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
10:00 EUROZONE M3 Money Supply 5.0% 5.0%
14:30 US Core Durable Goods Orders 0.4% 0.3%
14:30 US Initial Jobless Claims 242,000 233,000

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Mate Cser

Mate Cser

Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.

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