Bulls and bears talking points in the Wall Street this week | The Financial Express

Bulls and bears talking points in the Wall Street this week

Wednesday’s flash PMIs and Fed minutes will take center stage in an otherwise quiet week for economic data.

Bulls and bears talking points in the Wall Street this week
Dealers and bullish investors now have more faith in riskier assets because the data shows that Americans are still making purchases.

The market moves due to the battle between bulls and bears. The US Fed’s rate raise exercise and the incoming macro data, which are primarily trailing indicators, will be closely watched by traders and investors in the coming weeks and months.

Last week’s, Retail Sales report confirmed traders’ ongoing confidence in the U.S. economy, which came in higher than expected (1.3% vs. 1.0% projected). Dealers and bullish investors now have more faith in riskier assets because the data shows that Americans are still making purchases.

However, bears too might be trying to take control of the stock market. The Dow Jones’ market breadth shrunk considerably more last week. 68% of the Dow Jones stocks are trading above the 200-day moving average. The S&P 500 stock breadth, which revealed that 53% of the stocks are trading above their 200-day moving average, was another indicator of momentum weakening.

Also Read: This week on Wall Street: FOMC Minutes, quarterly earnings key investor watchouts

According to Factset, this is what the bulls and bears are talking about now.

Bullish talking points continue to revolve around cooler-than-expected October inflation prints, Fed officials’ implicit blessing of a slowdown in the pace of tightening, seasonality, buybacks, positioning, big equity inflows, resilient consumer balance sheets, China zero Covid tweaks, and property support measures and European gas storage dynamics.

Bearish talking points include Fed focus on upside risk to terminal rate, recession signaling from curve inversion, elevated macro uncertainty/softer demand messaging from companies, expectations for outsized negative earnings revisions, housing downturn, lagged China reopening, and lingering geopolitical tensions.

Also Read: Top gainers and losers in the US stock market

Bulls and bears will also be glued to some other key events and developments this week. The FOMC minutes will be made public on Wednesday. Markets will take the Fed’s expression of satisfaction with the rate of inflation decline as a positive indication. Wednesday’s flash PMIs and Fed minutes will take center stage in an otherwise quiet week for economic data. The market may show volatility in the run-up to Federal Reserve Chair Jerome Powell’s talk about the state of the economy and the changing employment market on November 30.

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First published on: 21-11-2022 at 20:45 IST