Forex Analysis & Reviews: 06.01.2022 - US premarket on January 6:...

06.01.2022 02:02 PM

US premarket on January 6: the main reason for the fall of the US stock market is the Fed

During this morning's trading on Thursday, Dow futures rose slightly after falling sharply yesterday. Everything happened because of the publication of the minutes of the Federal Reserve System from its December meeting, from which it became clear that the regulator is serious.

Dow Jones Industrial Average futures added 66 points or 0.17%. S&P 500 futures rose 0.17%, while Nasdaq 100 futures declined slightly. Shares of energy companies helped the market recover slightly, as oil prices rose by 1.5%. Marathon Oil shares gained 2.6%, Occidental Petroleum - 2.2%, and ExxonMobil - 1.3%.

As noted above, the minutes of the December meeting of the Federal Reserve System revealed that the central bank is preparing to abandon its support programs much faster than expected. Officials discussed reducing the Fed's balance sheet as another step to reduce its loose monetary policy during the pandemic.

Federal Reserve officials have said that a strengthening economy and higher inflation could lead to an earlier and faster increase in interest rates than expected, with some policymakers also advocating starting to reduce the balance sheet immediately after that. "Taking into account individual views on the economy, the labor market, and inflation, it may be justified to raise the federal funds rate earlier or faster than previously expected," the minutes of the December meeting of the Federal Committee says.

Fed Chairman Jerome Powell said at a press conference after the December meeting that recent inflation data had influenced their decisions. According to the Labor Department, consumer prices in the United States rose by 6.8% in the 12 months to November 2021, which was the fastest growth in almost four decades.

No one believed that the Fed would begin to act so actively, especially in terms of reducing the number of treasury bonds and mortgage-backed securities from its balance sheet. The minutes say that almost all Fed representatives agree that it would be appropriate to start reducing the balance sheet immediately after the first increase in interest rates on federal funds. All this led to a stock market crash.

Following yesterday's results, the Dow Jones Industrial Average blue-chip index closed 392.54 points lower, losing 1.07%. The S&P 500 fell by 1.94%, and technologically, the Nasdaq collapsed by 3.34% at once.

Quarterly earnings reports from Walgreens Boots Alliance and Bed Bath & Beyond are expected today. As for the data, it is also worth paying attention to the weekly report on initial applications for unemployment benefits in the United States. Economists expect the total number of applications for the week ending January 1 to be 195,000. Data on the trade balance will also be published, while economists expect that the deficit of goods and services will amount to $ 81.5 billion.

Let me remind you that yesterday the payroll processing company ADP reported an increase of 807,000 new jobs in the private sector, which indicates a possible surprise that tomorrow's report from the US Department of Labor is preparing for us.

In the premarket, banking and financial sector stocks remain among the growth leaders. For example, Bank of America gained 1.5%, and Citigroup - 1.4%. Wells Fargo shares rose 1.3%.

As for the technical picture of the S&P 500

The collapse of the index led to the demolition of several key levels. Now the bears' focus is on the support of $4,665, below which buyers will have really serious problems. A break in this range will dump the trading instrument in the area of $4,611 and $4,551. Buyers need to win back yesterday's fall, and given that tomorrow we are waiting for data on the labor market, which will be very positive, part of yesterday's sales may be quickly blocked today. A break of $4,722 will return the trading instrument to a larger resistance of $4,772.

你今天已经点赞上这篇文章了

*这里的市场分析是为了增加您对市场的了解，而不是给出交易的指示。

If you have any content questions, please contact editorial-board@instaforex.com

Stock Markets

Jakub Novak,
Analytical expert of InstaForex
© 2007-2025

该作者的更多文章

电子邮件订阅

EURUSD

Euro vs US Dollar

选择时间框架

分钟

小时

天

周

开始交易

通过InstaForex赚取加密货币汇率变动的收益。

下载MetaTrader 4并开启您的第一笔交易。

推荐文章

S&P 500 和 Nasdaq 100：從收益和地緣政治獲得的直接信號

美國市場處於十字路口：上漲或下跌？

4月15日美國股市：S&P 500 和 NASDAQ 漲勢放緩

市場取決於特朗普的行動：平靜似乎是幻想

由於特朗普推遲對部分商品徵收關稅，美國股市上揚

4月14日美國股市最新消息。隨著電子產品關稅暫停，SP500指數和納斯達克指數重獲動能

4月11日美國股市：標普500指數與納斯達克重挫

4月11日美國股市更新：在大幅反彈後市場大幅回調，市場恢復理性。

川普推遲關稅後股市飆升

美國市場強勁反彈，但特朗普與中國的貿易戰仍未解決

Top analytics