S&P500 closed lower for a second straight session yesterday, and futures are edging higher today as caution prevails ahead of the FOMC rate decision. While a 75-basis point hike is almost entirely priced in for November, attention will be on what the Fed has planned next. The US central bank is widely expected to raise interest rates by 75 basis points, the fourth-rate hike of this magnitude. However, what comes next is what the market is watching and what is expected to move the market.
Across October, bets have been rising that the Fed could adopt a less hawkish stance from December, helping the S&P500 to gain 8% across October. However, with core inflation still rising and yesterday’s JOLTS job openings which jumped 437k, the data may give the fed confidence to keep hiking rates aggressively, which could drag stocks lower.
Where might the S&P500 price head to?
The S&P500 has extended its rebound from the 2022 low of 3490, retaking the 20 & 50 sma before running into resistance at 3910, the weekly high. While the RSI remains above 50 and the price holds above trend line resistance, bulls could hope for further gains. A rise above 3910 could create a higher high, bringing the 4000 psychological level into play ahead of 4150, the falling trendline resistance dating back to the start of the year. Should buyers fail to defend the 50 sma at and trend line support at 3815, sellers could look towards 3750 the 20 sma?
Uber jumped 12%. Here’s why
Uber rallied 12% yesterday, reaching its highest level in a month as investors cheered the latest quarterly results. The ride-hailing app reported that passenger numbers were now higher than pre-COVID, revenue also topped analysts’ forecasts and the app service also sounded upbeat about demand going forward. UBER said it had not seen any weakness in the consumer despite high inflation squeezing household incomes. The encouraging report comes after UBER announced that it would pay UK tax authority HMRC £615M to settle VAT claims relating to changing the status of UK ride-hailing drivers to workers rather than contractors.
BTC/USD waits for the Fed
BTC/USD continues to trade sideways, holding over 20k as all eyes are on the Federal Reserve. While DOGE has been surging over the past week as Dogecoin fan Elon Musk purchases Twitter, the upside momentum failed to rub off onto Bitcoin or its peers. Instead, BTC/USD trades steadily above 20k, the level it retook a week ago amid rising bets that the Fed could adopt a less hawkish approach to rate hikes in the future. However, recent data suggests that the market could have gotten ahead of itself, and the Fed could keep hiking aggressively into next year. This scenario could be bearish for BTC/USD in the near term. In crypto news, Hong Kong has stated that it is ready to explore legalizing retail crypto trading, in sharp contrast to China’s crackdown, intensifying rivalry with Singapore.
- Support can be found at 20k (psychological level) and 18660 (last week’s low).
- Resistance for the crypto can be seen at 21100 (October high) and 22800 (September high).