Big Tech downgrades, inflation dampen mood. OPEC decides
US indices kicked off the new month on a negative note. The S&P500 fell 0.75% and Nasdaq closed 0.72% lower, on Jamie Dimon’s ‘hurricane’ warnings, a stronger-than-expected ISM manufacturing PMI, and higher-than-expected job openings, that fueled the hawkish Federal Reserve (Fed) expectations.
The US 10-year yield bounced above the 2.90% mark, the dollar index gained, as gold tipped a toe below the 200-DMA, $1842 per ounce on the back of rising US yields.
Bitcoin, on the other hand, fell as fast as it rose earlier this week, as investors’ appetite for risk fell sharply over the past sessions.
And oh, Janet Yellen said she was ‘wrong’ about inflation, as the war in Ukraine was an unexpected event that sent the energy prices soaring and boosted inflation, and the Fed started shrinking the size of its balance sheet yesterday, and the QT should technically lead to a further steepening of the curve.
On the bank research desk front, Morgan Stanley cut some big US tech outlooks, and Citi said they are sellers of rallies.
On the data front, today’s ADP report is important, but unless we have a decent surprise, it’s mostly unlikely to give a fresh direction to the market.
On the OPEC front, OPEC will likely stick to its production increase plan and won’t make miracles at this week’s meeting, but the Wall Street Journal reported that they could suspend the OPEC+ deal with Russia earlier than set.
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