03.12.2021: US stocks on seesaw (S&P500, DXY, USD/CAD, BTC/USD)
The US stock market is approaching a highly dangerous level at which a recovery might not be possible for a long time. Investors stoke fears about various headwinds. For example, mixed data on the US labor market.
Market participants have just found out that the US economy, excluding the agricultural sector, logged a minor increase last month. Earlier, the US labor market commonly added more than 500,000 jobs per month. This time, the economy created just 210,000 jobs. In other words, employment shrank in November. On the plus side, the jobless rate declined lower than expected.
The unemployment rate fell last month to the lowest level in a few years. This is a positive sign. What does it mean amid such a low employment increase? Perhaps, soft hiring is just temporary that will not make an adverse impact on the market.
Meanwhile, the S&P 500 closed with a notable gain on Thursday. Today it is correcting downwards, heading for 4,500, the level it closed yesterday. On the whole, the US nonfarm payrolls turned out to be mixed, though the overall dynamic is positive. So, the S&P 500 is likely to make a modest correction. It might be able to begin a recovery once the level of 4,550 is reached.
It is important to bear in mind significant news. Yesterday, on December 2, the US Congress and Senate passed the bill on raising the federal debt’s ceiling. From now on, the US administration is funded for budget spending until February 18. The decision on lifting the public debt ceiling eased pressure from long positions on the US dollar. Today its index is trading at near 96.15. The expected corridor is between 95.80 and 96.30. Hence, the index could dip in response to the mixed employment data.
The USD/CAD pair has climbed to 1.2810. Though the overall rise is still valid, a correction is highly probable because oil prices sharply rebounded yesterday. Thus, the USD/CAD pair is expected to trade lower on the back of growing oil prices. The currency pair is likely to hold in the corridor between 1.2750 and 1.2840.
What is going on in the crypto market? At present, traders are wondering whether it makes sense to anticipate the steady bullish trend of Bitcoin in the first half of 2022. Most market participants express positive market sentiment. Now the most popular crypto currency has got stuck in a range at around 57,500 dollars. Analysts believe that Bitcoin will resume its rally after it exits the trading range. The crypto maintains the bullish momentum. The argument for this scenario is that more and more investors prefer to hold digital tokens in their own crypto wallets. This factor keeps Bitcoin afloat. The nearest target for the flagship cryptocurrency is the area of 58 – 59,000 dollars. It serves as resistance that should be surpassed sooner or later.
To sum up, the US economy is on a sound footing, except soaring inflation. When it comes to this obstacle, the Federal Reserve will hardly respond with drastic counter-measures. Apparently, the White House is pleased about rhetoric of Jerome Powell. For this reason, President Joe Biden reappointed Jerome Powell for a second term. It means that the regulator will pursue soft stance on high inflation.
Have a nice weekend! See you tomorrow!
00:00 Situation on the US market
00:17 US Nonfarm Payrolls
00:45 US Unemployment Rate
01:04 S & P500
02:24 USD / CAD
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