January 2022 was challenging for the U.S. stock market as the month suddenly wiped out most of its gains from the last three months of 2021 amid rising chances of harsh monetary tightening this year. While sellers took a temporary breather, JPMorgan suggests that the market has not reached the bottom yet.
Technically we may be speaking about the sustainability of the current support levels: for the S&P 500 broad market index - at 4270-4275 points, for Dow Jones – at 33,000 points, and for Nasdaq 100- at 13,100 points. While indexes are above these levels, the upside correction may continue. But January is definitely closing in the negative zone.
The new trading week is full of challenges for global investors, as Austria will introduce mandatory vaccination making the European stock community worry that other European countries may follow with Germany being the next country to likely introduce mandatory vaccination. The widening of the mandatory vaccination list may prompt civil unrest as many people are already unhappy about being forced to receive booster vaccines every three months. The German DAX may go down aggressively if it dives below 14,900 points with the next stop at 13,700 points.
The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) is said to decide on further oil production increases of 400,000 barrels per day on February 2. It is hard to say how the market would react as even global demand for crude is on the track to recovery. But crude prices are at their five-year highs at $89-89.50 per barrel for the Brent crude benchmark. Any correction of crude prices is seen as logical at this point with a possible target at $86-87 per barrel.
The Bank of England (BoE) may lift its interest rates from 0.25% to 0.5% this Thursday. This move may strongly support the British Pound that suffered severely last week falling to 1.34 to the U.S. Dollar. Since the Cable has stopped above 1.3389, which is less than a 61.8% correction to the upside wave from 1.3167 to 1.3750, it has strong chances to return to the upward track. The first signal for this would be a breakthrough of 1.3450, but only an upside move above 1.3530 would secure an upside turnaround.
Last week closed with the release of the January Non-Farm Payrolls data on Friday. The U.S. economy is expected to have created 178,000 new jobs outside the agricultural sector in January 2022, while unemployment continues to run at the low level of 3.9%. This data may prompt temporary volatility, but is certainly unlikely to change the current sentiment in the markets.
Technically we may be speaking about the sustainability of the current support levels: for the S&P 500 broad market index - at 4270-4275 points, for Dow Jones – at 33,000 points, and for Nasdaq 100- at 13,100 points. While indexes are above these levels, the upside correction may continue. But January is definitely closing in the negative zone.
The new trading week is full of challenges for global investors, as Austria will introduce mandatory vaccination making the European stock community worry that other European countries may follow with Germany being the next country to likely introduce mandatory vaccination. The widening of the mandatory vaccination list may prompt civil unrest as many people are already unhappy about being forced to receive booster vaccines every three months. The German DAX may go down aggressively if it dives below 14,900 points with the next stop at 13,700 points.
The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) is said to decide on further oil production increases of 400,000 barrels per day on February 2. It is hard to say how the market would react as even global demand for crude is on the track to recovery. But crude prices are at their five-year highs at $89-89.50 per barrel for the Brent crude benchmark. Any correction of crude prices is seen as logical at this point with a possible target at $86-87 per barrel.
The Bank of England (BoE) may lift its interest rates from 0.25% to 0.5% this Thursday. This move may strongly support the British Pound that suffered severely last week falling to 1.34 to the U.S. Dollar. Since the Cable has stopped above 1.3389, which is less than a 61.8% correction to the upside wave from 1.3167 to 1.3750, it has strong chances to return to the upward track. The first signal for this would be a breakthrough of 1.3450, but only an upside move above 1.3530 would secure an upside turnaround.
Last week closed with the release of the January Non-Farm Payrolls data on Friday. The U.S. economy is expected to have created 178,000 new jobs outside the agricultural sector in January 2022, while unemployment continues to run at the low level of 3.9%. This data may prompt temporary volatility, but is certainly unlikely to change the current sentiment in the markets.
