S&P500
Confirmed COVID-19 cases as of early 25.01.2022
On Monday, the US stock market underwent a bullish reversal after a nosedive earlier in the day.
Despite sustaining heavy losses throughout the day, US indexes finished yesterday's session in positive territory. The Dow Jones added 0.3%, while the NASDAQ and the S&P 500 gained 0.6% and 0.3% respectively.
Asian markets sharply fell early Tuesday, with the Nikkei 225 losing 1.8% and the Shanghai Composite declining by 1.4%.
Crude oil prices decreased slightly, influenced by falling US indexes. The price of Brent crude declined by $2 to $86.50 per barrel.
Yesterday, the total number of confirmed Omicron cases was 2.4 million worldwide, out of which 465,000 were registered in the US, 255,000 in India, and 108,000 in France. The number of infections has notably decreased for the first time on a workday, while mortality remains at low pre-Omicron levels. The new strain of COVID-19 has led to an upsurge of cases in Russia - 65,000 infections were reported yesterday, with 20,000 being registered in Moscow.
The S&P 500 is trading at 4,410 and is expected to be in the 4,370-4,450 range. During Monday's volatile session, the index fell by 4% early on, but rallied later in the day and gained 0.3% at the end of the session. This bullish reversal indicates that the index's downward potential has been exhausted. The US stock market is likely to bottom out and try to rally in the upcoming days. Yesterday's dive was likely caused by equities being overbought, expectations of Fed's monetary tightening in the run-up to tomorrow's policy decision, and tensions in Eastern Europe over Ukraine.
All indexes from the NASDAQ to the Dow Jones has been on the decline lately, and there were no safe haven equities on the market. The strong state of the US economy suggests the recent dive was likely only a correction. The GDP is forecasted to gain more than 5% year-over-year, while the labor market and consumer demand data are strong, and there are no preconditions for a crisis in the real sector of the economy. Today, US consumer conference index data will be released - it is forecasted to decrease slightly from 115 to 110.
USDX is trading at 96.00 and is expected to be in the 95.70-96.30 range. The US dollar made slight gains in the run-up to the Fed meeting, but remains within the price channel.
USD/CAD is trading at 1.2640 and is expected to be in the 1.2580-1.2680 range. The pair reversed upwards, rising for the second straight day. The factor of high oil prices were outweighed by expectations of a stronger US dollar.
The US stock market is likely to bottom out and could rally afterwards, allowing traders to open long positions. There are many important events in the next three days - the Fed policy decision on Wednesday, US GDP data on Thursday and inflation data on Friday.
