Investor's Attention Shifts to Powell's Speech And Other Key Data

The market’s volatility levels continue to remain high but are still forming clear trend waves. The US Dollar and US Stocks are forming a retracement this morning but both managed to climb to a new weekly high (US Dollar) and weekly low (US Stocks). In general, the market proceeded as expected with no major shocks. The only major economic release over the past 24-hours was the US Consumer Confidence which came in slightly lower, which was expected.

Markets are also extremely interested in the price of Crude Oil which significantly declined over the past 3 weeks but is trading slightly higher this week. Currently, the price is moving within a price range between $77.92 and $79.62. Markets are starting to turn their attention to Sunday’s OPEC meeting rather than solely focusing on demand from China as in the previous weeks. Investors are mainly looking to see if OPEC will again decrease production targets and their view on demand during the first quarter of 2023.

The price of Bitcoin increased by over 3% during this morning’s Asian Session and managed to reach $17,000 for the first time since November 15th. However, traders are cautious that the price is now at a significant psychological price and a resistance level.

All assets continue to be influenced by the global monetary policy with most banks expected to take a slightly softer stance during the month of December. This is with the exception of the Central Bank of Turkey which continues to be one of the only regulators decreasing interest rates. Last week the CBT lowered its main rate from 10.5% to 9.0%, even though the current inflation level is above 80%. According to most economists, hyperinflation is also certain to force the economy into a recession with low demand.

The Turkish Lira lost almost 40% against the US Dollar this year so far. Most economists believe the Lira will lose at least another 13% during 2023. Though traders should be cautious about volatility and the nature of exotic currency pairs.

USD/TRY Daily Chart on November 30th

Dow Jones

The price of the Dow Jones again traded lower but is still seeing a healthy level of buyers. The price has again fallen to the previous price range between $33,389 and $33,977. The instrument has spent most of the past 2-3 weeks within the range indicating the market’s valuation. The price movement has formed a clear downward trend with lower lows and lower highs. However, traders will be eager to see how the market reacts now the price is back within the previous range.

Dow Jones 3-Hour Chart on November 30th

The instrument over the past week has largely been pressured from Disney, Apple, and Home Depot Stocks. Disney stocks continue to be pressured by the latest earnings reports and also a lower-than-expected dividend payment, which will not please investors. Apple has mainly been under pressure from their China connections and uncertainty regarding workers, lockdowns, and supply chain.

Walmart on the other hand is expected to show signs of strong growth prospects. The Company’s sales reached $25.3 billion, which has increased by 7.1% compared to the previous quarter. Additionally, operating income rose 3.9% to $6 billion. Investors are also expecting the company’s sales and profits to continue increasing due to the Christmas period and sales such as Black Friday.

Lastly, investors will be focusing on the speech scheduled for this evening by Fed Chairman, Jerome Powells. It is expected that Mr. Powell will confirm interest rates targets will remain the same but the regulator may lower the pace. The stock market is also likely to be influenced by today’s GDP figure and JOLTS Job Opening.

Summary:

• The Federal Reserve is expected to keep its interest rate targets the same but lower the pace.
• The Turkish Lira is expected to continue losing value in 2023 while the Central Bank continues to keep slashing interest rates.
• The Dow Jones declines back to its previous price range. Disney, Apple, and Home Deposit continue to pressure the index.
• Walmart is expected to show growth prospects according to analysts. The stock has increased by almost 8% throughout November.