S&P500
The US market has started correction.
The US market was closed on Monday for the federal holiday, which honors Martin Luther King's birthday.
The market closed mixed on Friday. The Dow lost 0.6%, while the S&P500 gained 0.5%.
S&P500 futures were down by 0.5% on Tuesday morning. The US market is likely to open with a marked decline.
Japan's indices were down by 0.3%, while China's indices added 0.7%.
Japan's industrial production increased by 7% in November. Economists had expected growth of 7.2%.
Oil is up by $1. Brent rose to $87.80. This is a new 5-year high. Oil is probably moving higher as Omicron is not causing a downturn in demand and production.
There were 2.1 million new Omicron cases around the world. This is about 1.5 times lower than the recent highs. In the US, there were 390K cases, but due to the weekend, the statistics are incomplete. The number of new infections in Europe is down. India saw an increase of 238K. The UK and France reported 84K and 102K new infections respectively.
The S&P500 is at 4,662, staying in the 4,620–4,660 range.
Experts estimate US market losses in the first weeks of 2022. Hundreds of companies traded on US exchanges have already fallen 20% or more from their highs. A fall of more than 20% from the highs for a stock or index could lead to a bear market. The US market is still in a correction phase. However, the economy remains strong. GDP growth persists, the labor market is strong, and incomes are growing. Only the high inflation rate of 7% per annum is disappointing.
There is no big news this week. Today, we can see big investors' sentiment.
Investors in the US are also focused on the sharp slowdown of the Chinese economy in Q4. Although the economy grew by 4% in Q4 against a forecast of 3.8%, overall, the economy expanded by 8% in 2021. China's growth slowdown will have a huge impact on global demand and commodity prices. However, it will probably cool down inflation.
USDX is at 95.30, trading in the 95.00–95.60 range.
The dollar has stopped falling. A new Fed meeting is due in a week, and the market will probably await further signals from Powell and his colleagues about high inflation, which has already become a political issue. It has caused Biden's rating to plummet to its lowest level since the beginning of his term. For the same reason, the Democrats could lose control in the lower house after the midterm elections to Congress.
USDCAD is trading at 1.2505 in the 1.2450–1.2550 range. The pair is again under pressure from a new oil rally. There is a possibility of a drop.
The market is calm. However, a new wave of sales is possible, as the bubble that occurred in the market in 2021 has not yet burst.
