US Stock Market Today
US stock futures, Dow Jones Industrial Average dipped 40 points, or less than 0.3%, while S&P 500 futures and Nasdaq 100 futures are trading higher.
Investors and traders are feeling more at ease today after the US financial industry recovered yesterday as a result of guarantees from US politicians. There is no question that politicians have been kept on their toes since SVB’s demise, but the good news is that, unlike during the financial crisis, they have responded quickly to offer appropriate assistance to the industry, which has helped to alleviate some of the fears. Indeed, only part of the problems have been addressed, but this does not imply that traders and investors should start walking about blindfolded. There is still a lot of danger since the entire thing started with the Fed hiking interest rates. We are afraid that the Fed is under pressure as a result of rising inflation data, which we saw yesterday, and that they will continue to tighten monetary policy.
One thing traders should remember is that the Bear Stearns occurrence in July 2007 calmed the markets when the government gave a credit line to the institutions, but the situation was so severe that the institute had to be purchased by JP Morgan in 2008, resulting in a full-fledged financial catastrophe. So a similar scenario might still be in play here as politicians continue their attempts to calm the markets, but the fundamental issues that lead to this problem for these banks in the first place remain the same. A simple approach would be to reintroduce loose monetary policy and kick the can down the road, with the process of dealing with the underlying problem continuing at a later point.
Economic Data
Yet, in the United States today, the attention will be on certain significant figures, such as US retail sales and the Empire State Manufacturing Index. If these statistics print a positive result, as predicted, the dollar index will likely gain momentum as the Fed’s forecasts to raise interest rates by 50 basis points improve once again.
What is In The UK’s Budget?
In the United Kingdom, the focus is on the new budget and what the Chancellor would say to alleviate the country’s troubles. Many of these, of course, are self-inflicted wounds like Brexit, and labour scarcity has become a major concern for many, particularly farmers. Therefore the emphasis will be on childcare support, which might draw part of the labour force back into the market, while he is also anticipated to talk about pension changes, which should encourage skilled employees to return. Traders will also be concerned about the company tax; of course, this is not the time to raise these taxes, but the truth is that government coffers are empty.
Is Gold A Good Buy Now?
We see additional correction for the precious metal as the dollar index gains pace and traders expect that the Fed’s attitude will remain intact despite the impact from the SVB. As previously said, the US Retail Sales and Empire State Manufacturing statistics are anticipated to cause more volatility in the dollar index, which will affect the price of gold.
Technically, as long as the price continues to fight the resistance of the 1,900 price mark and remains above this level, there is a greater chance that the price will make new higher highs. Yet, failing to do so may result in traders taking more profit on their transactions and additional weakening in the price movement.
What To Do With Bitcoin?
Bitcoin is still hanging onto its gains, but the price seems to be developing a bearish pattern, indicating that a top may be in the works for the time being. Bulls, on the other hand, should rejoice since the price has broken above the 25K level, which was an important resistance zone, and a breach of this level has opened the way for the price to re-test its next resistance zone of 30K.
