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Apple Inc Gains 7.60%; US Federal Reserve Monetary Policy in Focus

Miguel A. Rodriguez
Miguel A. Rodriguez
05 November 2022
Earnings reports continue to be positive, with major oil companies reporting significant gains on Friday, beating forecasts broadly.

We are nearing the end of the month, when market flows tend to be more volatile and less tied to fundamental market data. 

Without a doubt, events as important as the Federal Reserve meeting the day after tomorrow are at the center of the attention of all traders and investors. 

The PCE (personal consumption expenditure) figure, the Fed's preferred inflation figure, was released on Friday, and it did not surprise the market. The data was in line with forecasts, so it had no effect on the market and will not change expectations about what the Federal Reserve will decide at its next meeting. 

A large number of analysts and even institutions such as the asset management company BlackRock are inclined to think that the Fed will announce the "pivot" on November 2. That is, although they will decide to raise 75 bps, the rate of increases from now on will be lower and place the final interest rate of the fed funds between 4.5% and 4.75%. 

This shift is primarily due to the slowing of the US economy as a result of monetary policy tightening and the negative effects it has on the global economy. Even the US Senate wrote to the Fed, urging it to slow the pace of tightening monetary policy due to the negative effects on the labor market. 

Indeed, US Treasury bond yields have fallen significantly recently, with the US 10-year bond down around 4% at Friday's close. 

In this environment, the North American indices rose sharply in the session on Friday, aided by Apple Inc.'s strong performance, which recovered from a brief drop the previous day with a 7.60% gain on Friday. 

Earnings reports continue to be positive, with major oil companies reporting significant gains on Friday, beating forecasts broadly. 

With this, the Wall St. indices continue to rise, leaving behind interesting technical figures, such as the DowJones 30, which has overcome a major pivot or resistance zone around 32,700 and opens the way to further advances. 

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Source: 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.