US OPEN: Markets moving lower after hawkish minutes

16:08 6 January 2022
  • US markets open lower on Thursday
  • Tech fails to rebound, US100 cracks through 15700 level
  • US data supports hawkish Fed
     

US market had a volatile finish to the Wednesday session as the FOMC minutes revealed that a serious hawkish turn could be in play. Since investors have long assumed the Fed is always there to support markets, a hawkish turn could be very ugly for the markets. However, even after taking into account Wednesday reaction markets are still so close to all-time highs that it’s way to early to talk about panic. If anything there seems to be a kind of disbelief that the Fed is serious about all of this.

While US100 is fighting for its life on 15700 support and investors are trying to buy the dip there to save the trend, US500 is comfortable within the broad upwards channel

The data that has been released today will hardly help sentiment. Weekly claims remain near multi-decade lows supporting a view of strong labour market, massive trade deficit points at (too) strong demand and ISM services offers a double whammy of lower activity and yet higher prices. While the data package is not as relevant as the NFP (tomorrow) it still adds to the picture that reinforces views at the Fed.

Lower commodity prices in December helped drive ISM manufacturing prices paid down but this is not the case for services where price component remains close to records. Source: Macrobond, XTB Research

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

Back

Join over 1.6 Million investors from around the world