Hi, dear traders! A flood of news will trigger high volatility during the New York session today. Some news may reinforce the negative sentiment while other news may revive the risk-on mood. InstaForex experts are ready to share their analysis and forecasts!

Market sentiment went through abrupt changes yesterday. Despite positive macroeconomic data for stocks, Wall Street slipped into risk aversion by the closing bell. Shark remarks by Fed policymakers pushed the benchmark indices down. As a result of massive sell-offs of risky assets, the doom and gloom settled on the stock market. The Dow Jones incurred the heaviest losses. The index tumbled by 613 points or 1.8%. The Nasdaq lost 1.2%. The S&P 500 sank by 1.5% to close at 3,920.
The three indices traded in the red in the New York pre-market, promising another day of sell-offs. The S&P 500 is expected to trade in the intraday corridor between 3,810 and 3,990.
The Nasdaq halted an 8-day winning streak and closed with losses. The S&P 500 and the Dow Jones closed with the steepest intraday fall since December 15. The weakest sectors were the retail sector which dropped by 2.7% and the utility sector which shed 2.4%. None of the sectors in the S&P 500 showed gains.  
Yesterday, investors found out that US retail sales, factory inflation, and industrial production declined in December steeper than expected.

Fed Presidents James Bullard and Loretta Mester acknowledged the common trend of a slowdown in inflation but they advocated for a further rate increase to 5% or even higher.

Investors had a hope that the US Fed could revise its hawkish policy and decrease interest rates. In practice, the regulator will hardly venture into such moves this year. This conclusion can be made following remarks of the Fed policymakers.

As for corporate news, Moderna shares rose by 3.3% in light of the report proving the efficiency of its vaccine for the respiratory virus.

Microsoft shares fell after the statement that the company would fire 10,000 employees.

Tesla shares tumbled by 2% in the pre-market today. Apple, Amazon, and Microsoft also made losses.

Today the market found out that Amazon would make redundant its employees in the US, Canada, and Costa Rica according to its plan to fire 18,000 people. Such lay-offs will affect almost 6% of Amazon’s employees.

When it comes to the economic calendar, investors are absorbing US building permits for December, a weekly update on unemployment claims, and the industrial survey by the Federal Reserve Bank of Philadelphia for January.
The report on building permits proves that the US housing market is cooling down. The number of building permits fell in December by 1.6% from a month ago to 1.33 million, less than the forecast for 1.37 million. The latest score is the weakest since June 2020.

The manufacturing index by the Philadelphia Fed climbed to -8.9 in January from -13.7 in December, higher than the consensus for -11. More than 33% of firms reported lower activity. The employment index improved to 10.9 in January from -0.9 a month ago.
The weekly update by the Labor Department confirms the health of the labor market. Initial jobless claims showed another weekly decline by 15,000 instead of the long-awaited growth. The number of initial claims sank to 190,000 last week following 205,000 a week ago. The market had expected a rise to 214,000.

Netflix, American Airlines, Costco, and Procter & Gamble are due to provide their earnings for the fourth quarter later today. Besides, more Fed policymakers such as Lael Brainard, John Williams, and Susan Collins will make their comments. The currency market is trading under high volatility. Yesterday, the US dollar index tested a low of 101.5 and sharply recovered to 102.4. The greenback remains under pressure today. Its index has settled above 102 trading within the intraday corridor between 101.5 and 102.7.
As expected, the weakness in the US dollar was cured by the Fed’s hawks. They sent the message about further rate hikes despite the signs of inflation deceleration.


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00:00 INTRO
00:20 S&P500
01:19 USA
02:07 QUOTES
03:28 US BUILDING PERMITS (DECEMBER)
03:52 FEDERAL RESERVE BANK OF PHILADELPHIA MANUFACTURING INDEX (JANUARY)
04:17 US INITIAL UNEMPLOYMENT CLAIMS
04:59 USDX
05:54 USD | CAD
07:05 BTC | USD