S&P500
The global stock market faced significant losses. The US main stock indices declined on Friday. Thus, the Dow Jones Industrial Average slipped by 2.5%, the Nasdaq Composite lost 2.2%, and the S&P500 dropped by 2.3%.
Oil also tumbled by $10 on Friday. Brent crude depreciated to $72 from $82, declining by more than 10%. On Monday, oil prices rebounded by 5%. Now, Brent is trading at $75.40.
OPEC+ decided to reschedule the meeting amid the recent slump to evaluate the market condition and the epidemiological situation that has been worsening due to the spread of the new Omicron strain of coronavirus.
Global epidemiological situation. The fourth coronavirus wave is still in force. At the weekend, the US recorded a decline as usual. Thus, the daily number of new virus cases advanced by 20K, whereas in the world, 390K people caught the virus. In Europe, the situation is also deteriorating. In Germany, the number of new cases totaled 38K, the UK – 37K, and in Russia – 33K. These countries are taking the leading positions in both Europe and the world in terms of new infections.
S&P500 is trading at 4,594, the range is 4,580 – 4,630.
Notably, news about a new coronavirus strain just pushed investors to sell the asset. The fact is the market was significantly overheated and needed a large-scale correction that began on Friday, between the national holiday and the weekends. Although the S&P500 nosedived, it failed to hit the 50-day moving average, the point where large funds start buying the asset. At the moment, the index is trading at 4,594, whereas the 50-day MA is located at 4,520. Thus, the asset should fall by 1.5% to touch the 50-day MA.
At the same time, the S&P500 futures opened with the rise of 0.7%. The asset may rebound today to 4,630. However, this does not mean that it will jump to record highs in the near future. The correctional process is likely to continue and the index may show a considerable decline.
On Monday, the US stock market may receive support from a strong retail sales report. Thus, on Black Friday, sales in ordinary stores exceeded the online ones. The fact is that people got bored at home and decided to visit ordinary shops. However, this may result in a larger number of new virus cases. Notably, the world's largest producers of vaccines, Moderna and Pfizer, have already started the research to find out the effectiveness of their vaccines against the new strain.
The key news for the US market will be disclosed at the beginning of December that is on Wednesday and Friday. The US will report on its employment rate and economic growth in November.
USDX is trading at 96.25, the range is 95.90 - 96.40. On Friday, the US dollar index slumped amid a decline in the US stock market and oil prices. The US dollar is more resilient than the stock market. Nevertheless, the uptrend in the greenback has stopped. In several days, we will be able to provide a more accurate forest for the US dollar rise.
USD/CAD is trading at 1.2745, the range is 1.2700 - 1.2800. On Friday, the USD/CAD pair jumped despite a decline in the US dollar against a basket of major currencies. The Canadian dollar lost value amid a slump in oil prices. On Monday, the currency started recovering, but the USD/CAD pair is still gaining in value.
Conclusion. We should wait for the market reaction to a decline recorded on Friday. To provide the forecast, we should know the magnitude of today's rebound and the close price.
