Customized watchlists with full streaming quotes from leading exchanges, such as NASDAQ, NYSE, AMEX, OTC Markets Small-Cap, LSE and more.
Over the course of last week, the S&P 500 index gained 0.6%, the Russell 2000 index +0.6%, and the NASDAQ Composite +1.4%. In Europe, the EURO STOXX 50 index added 0.5%, and the STOXX Europe 600 index +0.7%. Among other things, stock market optimism was boosted by Jerome Powell’s dovish speech. Although inflation pressures remain high, the regulator seems prepared to moderate the pace of interest rate hikes.
As of this week, investors will pay close attention to the weather forecast in the European Union. Gas and electricity consumption is expected to increase with the arrival of the first cold snaps. Although 98.24% of the GSUs are complete, a further drop in temperature could cause a jump in the price of natural gas.
This, in turn, could easily trigger inflation expectations. Subsequently, regulators would be forced to continue tightening regulatory policy. Investors will follow the ECB governor’s speech on Thursday for more clues. The hawkish rhetoric, in combination with the falling PPI in the US, could support the EUR/USD pair.
Speaking of the world’s first economy, even though the recent labor market report was better than expected, companies are preparing for the worst. After Big Tech, Warner Bros. and Gannett Co. started to reduce their headcount. Unless forecasts improve, more layoffs could follow.
The question then becomes, how to prepare for a possible recession? By increasing investments in defensive assets. Among other things, demand has increased for stocks in the energy and financial sectors, the healthcare industry, and gold. A boost to the bearish trend could come from the pessimistic US service sector PMI data for November.
The index will be released this afternoon and could set the tone for the rest of the week. The fact that the economy is slowing will also hurt the bond market. According to Refinitiv Lipper, investors withdrew $1.7 billion from high-yield funds in the last reporting period.
