S&P 500
The US stock market plunged on Tuesday, with the Dow Jones losing 1.5%, NASDAQ plummeting by 2.6%, and S&P 500 tumbling by 1.8%.
A plunge in the US stock market triggered a fall in the global equity market: Japan's benchmark Nikkei 225 dropped by 2.9% and China's Shanghai Composite Index lost 1.2%.
Russia's major stock market index nosedived by 6% yesterday due to possible new sanctions imposed by Western countries on Russia in case it attacks Ukraine. A plunge in Russia's stock market came as foreign investors began to lose interest in the stocks of Russian companies. The stock value of Sberbank, where shares held by foreign investors total 45% of the company's stock, declined the most compared to other Russian firms. The Russian stock market kept falling on Wednesday morning.
Energy: oil added 1.3% on Wednesday morning. Brent is traded at $88.60 per barrel. As we can see, a fall in the US stock market has had no effect on oil that is now traded at the highest level since 2014.
Omicron: 3 million new cases were registered yesterday. France and the US reported 460K and 540K new cases respectively. The daily increase in Germany's infection rate is 95K. India and Italy recorded a daily rise in new cases by 280K and 228K respectively. The global deaths rate due to Omicron remains relatively low.
The S&P 500 is traded at 4,577 in the range of 4,540-4,600.
Goldman Sachs released a strong earnings report. Its annual net profit rose 2.3 times to $21 billion. Nevertheless, it had no effect on the US stock market. Expectations of monetary policy tightening by the US Federal Reserve and a stock market bubble are seen as the main reason behind the plunge. Oil is likely to trade above $100 in 2023, Goldman Sachs projected.
Analysts also blamed yesterday's drop in the US stock market on rising Treasury yields that surged to their 2-year high. This will clearly affect the Fed's decision to wind down the QE program, as well as its upcoming meeting.
Data on building permits for December will be released in the United States today. The reading is projected to come at 1.7 million y/y.
The US dollar index is traded at 95.60 in the range of 95.40 - 95.90. USDX showed a significant increase yesterday. The corrective move stopped, and the dollar is prepared to grow further with the Fed's support.
The USD/CAD pair is at 1.2500 in the range between 1.2450 and 1.2550. The pair failed to rise despite a stronger US dollar because rising oil prices provide solid support for the loonie.
Summary: A correction in the US stock market continues. A rebound may occur today or tomorrow. You may start to buy at current prices but be careful when opening trades.
