#SP500:
January market rally is once again stemming from a bout of institutional investor short covering and rising equity demand from retail investors. However, despite the rebound in purchases, the aggregate retail flow has not yet recovered to previous highs, meaning that we’re still in a longer-term downward trajectory. The Federal Reserve has raised interest rates significantly throughout the economy and now it the time to “slow, but not halt” the pace of increase, said Federal Reserve Governor Christopher Waller. This is a positive signal for the stock market.
Trading recommendation: buy 3955 and take profit 4045.
XAUUSD:
Right now, there’s a gap between where the bond market says interest rates are heading, and where Federal Reserve officials say they’re going. Traders are expecting interest rates to be cut by the end of the year, down to 4.5%, while Fed officials see rates holding above 5%. The Federal Reserve can probably start to slow its balance sheet runoff once bank reserves fall to around 10% or 11% of gross domestic product, Fed Governor Christopher Waller said. This is a negative signal for the dollar and a positive signal for precious metals, since assets have an inverse correlation.
Trading recommendation: buy 1909 and take profit 1940.
#WTI:
Oil prices settled higher, extending a recent rally built around rising Chinese demand, while the market wrote off a second straight week of large builds in U.S. crude inventories. Chinese oil demand climbed by nearly 1 million barrels per day from the previous month to 15.41 million bpd, the highest level since February, according to the latest export figures published by the Joint Organisations Data Initiative. Energy markets could be tighter in 2023, especially if the Chinese economy rebounds and the Russian oil industry struggles under sanctions, International Energy Agency head Fatih Birol said.
Trading recommendation: buy 80.30 and take profit 84.00.
