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Wall Street indices continued lower for a fifth day

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Miguel A. Rodriguez
Miguel A. Rodriguez
05 November 2022
USD hit new highs after data showed the US economy remained strong last month, despite Fed’s tight monetary policy and raised interest rates

The S&P 500 started the session down more than 1% yesterday, the 10-year Treasury yield hit the 3.25% level, and the US Dollar rallied on speculation that the latest data will force the Fed to raise rates more aggressively. The market already anticipates 0.75% at its meeting this month.

 

Overall, risk assets started the day under pressure after China locked down Chengdu due to COVID, which may further worsen the outlook for global economic growth.

 

Later, in the United States, the jobless claim data, which was lower than expected, led the market to anticipate strong employment data and today’s non-farm payrolls.

On the other hand, the ISM manufacturing PMI data surprised with a higher-than-expected figure.

 

All of this makes investors think about an economy that shows no signs of weakness and could lead the Fed to continue with high-rate hikes.

 

Given this perspective and awaiting the relevant employment data to be published today, the American stock market indices continue to be under strong selling pressure. So is the case of the technological Nasdaq100, the most sensitive to the increase in financing costs.

 

In the commodity market, oil fell sharply after China decided to close the city of Chengdu, causing an increase in risk aversion in the market.

WTI oil is already very close to the support level of $85.25/barrel below, which would break down to levels close to $77 per barrel.

Gráfico, HistogramaDescripción generada automáticamente

 

Sources: Bloomberg, Reuters

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.