This Week's Midterm and CPI Results To Shape the Markets this Month

Last week was a busy week for the financial trading markets, and this week won't be any different. Investors continue to focus on the US employment figures from last week. The JOLTS Job Openings increased to 10.75 million, the NFP read 261,000, the Average Hourly Earnings increased to 0.4% and lastly, the Unemployment Rate increased to 3.7%.

In general, the employment figures were positive and showed resilience, as they have over the past 6 months. The only slight concern was the Unemployment Rate which increased above the 3.6% in line with predictions. Another concern is the current level of layoffs from large companies. The latest reports are from Meta and Twitter which have both confirmed a large number of employees laid off.

This is likely to continue to influence the US Dollar and US stocks, but investors are also turning their attention towards the Midterm elections. Price movements may be unclear before the election results but are likely to take a clearer direction afterwards. However, the most important announcement this week, not only for the USD but also for Gold, Silver and US Equities, is the Consumer Price Index.

The CPI results are expected to show that inflation has increased from 0.4% to 0.6% -  this is the highest since July 2022. The CPI reading is likely to be the most influential event of the week. The Core CPI figures were expected to slightly decline to 0.5% from 0.6%. However, even with the decline, a rate of 0.5% is still considered extremely high. Typically, the Core CPI figures should be between 0.1% and 0.3%.

Crude Oil

The price of crude oil opened on a negative market gap along with most US assets, but they have all continued to increase in value thereafter. The price of oil does not show any signs of major declines as the price remains above most moving averages. However, the price is mainly being driven by fundamentals at the moment.

Crude Oil 30-Minute Chart on November 7th

Investors are currently concerned about the level of supply after G7 nations and other certain “friend nations” agreed to introduce price caps on oil prices from Russia. Russia has already advised that it will not agree to this and simply “sell their oil elsewhere”. President Biden, on the other hand, has advised that the US Government will proceed with selling a further 15 million barrels from their US reserves.

Bitcoin

The price of Bitcoin took a considerable hit after the latest set of employment figures as well as Powell’s forward guidance. The instrument has now moved back into the previous price range seen towards the end of October, and there is a clear attempt to fully correct back to $20,050. Investors are still currently following the Twitter and Elon Musk story, hoping that the acquisition is likely to support the demand for cryptocurrencies. Twitter is expected to soon allow users to buy and sell NFTs with Dogecoin as its base currency.

Bitcoin 30-minute chart on November 7th

The overall market capitalization for cryptocurrencies has actually increased for a 4th consecutive week, which is positive for the market. On the other hand, the market share of Bitcoin has actually declined over the past week from 39.6% to 38.6%.

DowJones

The price of the DowJones is on the rise again during this morning’s futures market. The price has increased by just under 1% since the market opened, though investors are still cautious about the close proximity of recent support levels at $32,617 and $33,073.

The index will be influenced by the next, and one of their last earnings reports - Disney. Disney is expected to release their earnings report tomorrow after the market closes. The company’s Earnings Per Share is expected to significantly decline from $1.09 to $0.60.

DowJones 1-hour chart on November 7th

However, as mentioned at the very start of the article, the most influential event is most likely to be related to this Thursday’s CPI figures.

Quick Summary:

• The US employment sector shows resilience but cannot support the US Dollar.
• Economists advise that this week’s CPI reading as well as the Midterm results will be this month’s main price driver.
• The US Government will proceed with selling a further 15 million oil barrels from their reserves.
• Market capitalization for the cryptocurrency has actually increased for a 4th consecutive week, but Bitcoin’s  market share has declined by 1%.
• Disney is expected to release their earnings report tomorrow after the market closes. The company’s Earnings Per Share is expected to significantly decline from $1.09 to $0.60.