Riding the Wave: US Stock Market Soars Amid Economic Shifts and Crypto Gains
Stocks in the US finished higher on Wednesday, with the Dow Jones advancing 163 points to close at a mid-August high. The S&P 500 added 0.1%, and the Nasdaq ended marginally in the green. This positive trend followed yesterday’s cooler-than-expected inflation data, which has led to the odds of another hike by the Fed falling to almost zero. The market is now pricing a 50 basis-point rate cut by July.
Economic Data
On the data front, US producer prices declined 0.5% in October, the biggest drop since April 2020, signaling that inflationary pressure continued to ease. However, another report showed retail sales went down 0.1%, less than market expectations of a 0.3% fall, and prior months were upwardly revised.
Corporate News
In corporate news, Target witnessed a surge of 17.8% after the retailer’s profits surpassed estimates. On the other hand, Nvidia fell 1.5%, breaking a 10-day winning streak. After the bell, Palo Alto Networks and Cisco are due to report.
Just before today’s trading session, we published our Trading signals, including a target buying signal at a price of 114.22 USD. Unfortunately, the market jumped over the order, and we did not manage to purchase the TGT (Target Corporation) shares. However, congratulations to all who bought these stocks earlier.
Cryptocurrency Market and Regulatory Changes
In the cryptocurrency market, Bitcoin and Ether are on the rise. Bitcoin is leading the charge with a 4.29% gain, while Ether follows with a 2.40% increase.
In February 2023, the SEC proposed changes to the “Custody Rule.” This rule requires RIAs to safeguard client funds and securities with a qualified custodian. The recent proposal would broaden the current scope of the Custody Rule by requiring RIAs to safeguard all client assets — including digital assets — with a qualified custodian. While the SEC has yet to make a final decision, the answer is clear: RIAs in crypto need to take a serious look at regulated custody.
The BTCUSD price chart indicates that the price is seeking support at the Fibonacci 0.50 support level:
Business Inventories
Total business inventories in the United States rose by 0.4% month-over-month in September 2023,. The same pace as in August and matching market forecasts. It marks the third consecutive month of increases in business inventories, amid higher stocks at retailers (0.9% vs 1% in August), merchant wholesalers (0.2% vs -0.1%), and manufacturers (0.2% vs 0.3%). Year-on-year, business inventories grew by 1.3 in September.
Dollar Index
The dollar index edged up to 104.3 on Wednesday, attempting to recoup some of the sharp losses from the previous day but remaining close to its weakest level since early September. Investors were digesting a batch of economic data and assessing the potential impact on the monetary policy path.
The dollar index is trying to recover after yesterday’s plunge. However, it’s not a sustained rise yet:
NY Empire State Manufacturing Index
The NY Empire State Manufacturing Index rose 14 points to 9.1 in November 2023, the highest reading since April and better than market forecasts of -2.8, indicating a rebound in business activity in New York State. However, the outlook took a sharp downturn, with firms no longer anticipating better conditions in the next six months.
In conclusion, the US stock market is showing signs of resilience amid a mix of economic data and corporate news. The cryptocurrency market is also experiencing gains, with Bitcoin and Ether leading the way. However, the regulatory landscape is changing, and businesses need to adapt to these changes to ensure continued growth and success.
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