Stock Market Outlook
2022-11-22
U.S. stock market - Focus on the minutes of the FOMC meeting
European equities - Focus on the minutes of the European Central Bank's Management Board meeting
The S&P 500 and the Dow Jones Industrial Average were down slightly. The market speculated on the prospect of monetary tightening as several senior US Federal Reserve officials mentioned in speeches and other places a slowdown in the pace of rate hikes and a boost in the highest point of the policy rate (the terminal rate), which continued to advance without direction near the high value point. The upside is limited by the level of U.S. Treasury yields.
The minutes of the FOMC meeting (the November 1 and 2 meetings) will be released on November 23.An understanding that it will weaken its previous inflation-control-oriented stance and take into account the economic rhetoric could be a clue to the stock's rise, so it should continue to be watched. However, this week the market will be closed on the 24th due to the Thanksgiving holiday, and trading hours will be shortened on the 25th. It is difficult to create a clear direction.
Europe's STOXX 600 index rose for the fifth consecutive week. In addition to a major U.S. retailer forecasting lower consumer demand, the U.K. government announced a fiscal consolidation plan anchored by tax increases and spending cuts. The European Central Bank (ECB) officials said that the pace of interest rate hikes may slow down, rallied and rose slightly over the weekend.
Europe's STOXX 600 index rose 12.3% from Oct. 12 to the weekend. Declines were led by the financial, capital goods and general consumer goods sectors, while the rise in German government bond yields seemed to stall and repo was happening cheaply. This week, the minutes of the ECB's Governing Council meeting (October 27) will be published, hoping to confirm the content of the discussion on the continuation of interest rate hikes.