Stocks drop with hawkish Powell

Macroeconomic/ geopolitical developments

• Federal Reserve hikes 75bp again but signals possible slowdown of pace of hikes.
• But Chairman Powell makes hawkish comments regarding a higher than expected rate peak.

• US Employment report shows more jobs added that anticipated, though the Unemployment rate was higher than consensus.
• Conflicting rumours abounded regarding the possibility of China moving away from its zero-COVID policy.
• The Eurozone YOY inflation rate accelerated by more than expected to 10.7% in October.
• The Bank of England (BoE) increased interest rate by 0.75%, the biggest hike for over 30 years, up to 3%, the highest since 2008

Global financial market developments

• The major US stock averages setback last week after the more hawkish Fed tone.

• European equity indices were lower too.
• The Chinese stock market whipsawed with the conflicting rumours regarding a shift away from a zero-COVID policy.
• US 10yr yields were higher again, back close to its recent high!
• US Dollar was erratic, as DXY rallied then setback.

• Gold plunged and surged to ease negative pressures.
• Oil prices rallied close to a multi week high.
• Copper surged to the top end of the wide consolidation range.

Key this week

• Geopolitical Events: The US midterm elections are on Tuesday. Friday 11^th November is US Veterans Day, Bond markets are closed
• Central Bank Watch: No Central Bank activity of note.
• Macroeconomic data: A quiet week overall, but Thursday’s US CPI release is huge!.

Steve Miley (The Market Chartist)

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued