Robust consumer activity in the US dampened optimism about deflation. Though the retail sales data did not drastically change the outlook for the Fed’s agenda, the stock market has moderated its rally. The economic calendar for the US contains a series of data that might clear the outlook for the Fed’s interest rates. Besides, more US retailers are due to report on their quarterly results. This will also shed light on consumer sentiment. The benchmark stock indices closed yesterday in the green. The Dow Jones logged the biggest gain. The S&P 500 and the Nasdaq closed almost flat. The S&P 500 inched up by 0.16% to close at 4,502. The major stock indices went down in the New York pre-market. The fresh economic data lifted market sentiment. As for the intraday outlook of the S&P 500, the bulls find it hard to sustain the index above 4,500. The basic scenario suggests an intraday corridor between 4,476 and 4,520. The most optimistic scenario looks like a climb to 4,560. The most pessimistic one is a decline to 4,467. The US stock market closed with modest gains yesterday driven by the quarterly results of Target. Its shares leapt by 17.8%, the fastest intraday growth since August 2019. The retailer provided profit estimates for the final quarter which surpassed Wall Street consensus. The upbeat forecast comes as a result of lower expenses in supply chains. Good prospects of Target pushed up shares of other retailers so that the consumer goods index in the S&P 500 was the best performer with its 0.7% increase. The factory inflation report showed on Wednesday the steepest fall in US producer prices in October for the three and half years. In a separate report, retail sales logged a less-than-expected decline. These two figures confirmed the likelihood that the Federal Reserve has been following a path to a soft landing. Market sentiment was also improved by the news from the House of Representatives who passed a stopgap spending bill that would prevent a government shutdown with broad support from lawmakers from both parties. The Senate and House of Representatives have to pass the legislation until midnight Friday. Today futures on the stock indices are trading lower as optimism about the end of the Fed’s rate hikes is ebbing away. Meanwhile, the market cheered a weekly update on unemployment claims. The US Labor Department reported that initial jobless claims increased by 13,000 to 231,000 last week. It is the highest score for nearly three months. The data indicates clearly sluggish hiring among US employers. Investors could sigh with relief, but another report appeals to caution in predicting the future of the US economy. The manufacturing index by the Philadelphia Fed remained on negative territory at -5.9 in November. The reading is stronger than the expected minus 9. Still, it is the 16th negative score in the last 18 months. Forward-looking indicators signal that companies express moderate expectations for 6 months ahead. Market participants will be alert to new comments by Fed policymakers, including voting members New York Fed President John Williams and Fed Vice Chair for supervision Michael Barr. Although Fed officials have refused to completely rule out the possibility of another rate hike this cycle, San Francisco Fed Governor Mary Daly described the latest inflation picture as “very, very encouraging.” A headwind for the stock market today remains disappointment following the talks between US President Joe Biden and Chinese leader Xi Jinping, which could put pressure on the technology sector. The US currency tried to recoup its losses for the most part of the day. However, encouraging signs from the labor market dispelled dollar optimism. As a result, the US dollar index retreated to 104.1, having lost 0.2% down.
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00:00 INTRO
00:35 S&P500
01:36 WALL STREET
02:45 CONGRESS
03:10 INITIAL UNEMPLOYMENT CLAIMS
03:48 PHILADELPHIA FED MANUFACTURING PMI
04:17 QUOTES
05:02 USDX
06:21 USD | CAD
07:06 BTC | USD
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