During Tuesday's session we can observe a solid performance of major stock indices. Despite the fact that the beginning of the session in Europe did not look too optimistic, the following hours brought a change in sentiment. One of the reasons that supports risky assets is weaker data from the US economy, which signal that the Fed could moderate the process of an interest rate hike.
US Conference Board Consumer Confidence index decreased to 102.5 in October, from the previous month's downwardly revised 107.8 and compared to market expectations of 106.5. The Richmond Fed Manufacturing Activity Index fell to -10 in October from 0 in September, the lowest since May of 2022, well below analysts’ estimates of -5. This data fits in a recent narrative from last week’s WSJ report that hinted some Fed members are concerned about overtightening. San Francisco Fed President Mary Daly was among those who have this view, saying that the central bank should start discussing the potential of a smaller rate hike in December. Today at 7:00 pm Fed Waller may provide further hints regarding US central banks rate hike path.
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Create account Try a demo Download mobile app Download mobile appAdditionally, it is worth taking into account the ongoing earnings season on Wall Street, where the majority of companies posted solid results, which also supports the positive sentiment. Today investors welcomed a slew of upbeat earnings results from General Motors and United Parcel Service while fading Treasury yields brought some respite to growth stocks. Microsoft and Google-parent Alphabet are due to release their earnings results today after the bell, while Apple, Meta, and Amazon report later in the week, The tech giants' performance will be a key determinant of sentiment in the coming days. The decisions of two central banks should also be mentioned. Money markets bets swung to a 75 bps rate hike by the BoC tomorrow, from a previous consensus of a 50 bps increase, while ECB is highly expected to deliver another 75 bps rate hike on Thursday.
US100 broke above the upper limit of 1:1, which, according to the Overbalance methodology, may herald a shift in sentiment. At the same time, the index exceeded the upper limit of the downward channel, which also supports the upward scenario. As long as the index sits above 11,440 pts level, the upward movement may continue. Source: xStation5
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