04.10.2022: US stock market extending rapid rally (S&P500, USD, CAD, Bitcoin).
Wall Street has perked up. The US dollar is loosening its grip. Investors are gaining an appetite for risky assets. Let’s discuss what has changed in market sentiment.

The US stock market eventually halted its protracted losing streak and opened a new quarter with confident gains. The Dow Jones jumped 760 points or 2.66% yesterday. Weighed down by gloomy Tesla forecasts, the Nasdaq closed with the smallest gains of 2.27%. The S&P 500 managed to recover 2.59% to close at 3,678. Despite cautious optimism among investors and pessimistic analysts, Wall Street opened in the green today. The major stock indices traded higher in the New York pre-market. The S&P 500 is expected to trade in the intraday corridor between 3,640 and 3,820. A strong rebound does not mean a trend reversal. Nevertheless, the market found enough reasons for optimism on Monday. Wall Street benefitted from the US dollar’s weakness, a decline in yields of US Treasuries, and fresh macroeconomic data. The market also cheered the fact that the British Government canceled the plan on tax cuts and fiscal stimulus. The news was announced by the new UK Chancellor of Exchequer. The data on the US factory activity showed that the manufacturing sector expanded in September at the slowest pace in almost two and half years because new factory orders contracted amid the Fed’s aggressive rate hikes. The ISM MANUFACTURING PMI slipped to 50.0 last month, the lowest reading since may 2020, after 52.8 in august. The actual score is much weaker than the expected 52.2. Experts say that a drop in the index means that companies are braced for the potential decline in demand in the future. In a separate report, the employment in the manufacturing sector went down last month for the fourth time this year.
Besides, the Commerce Department reported on Monday that construction spending tumbled the most in August in the last one and half years.
Such data proves that the US economy is cooling down. Indeed, rising borrowing costs are bringing down demand. Still, it is too early to expect the Fed to soften its rhetoric, bearing in mind its commitment to the struggle against high inflation.
This week, the economic calendar is full of reports on the US labor market.
Meanwhile, the stocks of companies with mega capitalization are also poised to grow. Shares of Apple, Microsoft, Amazon, and Meta are making promising moves higher. Even Tesla stock rebounded 3.6% in the pre-market following the biggest sell-off yesterday. Shares of the high-tech giant plummeted 9% on Monday in light of dismal data of quarterly deliveries. The US dollar is taking a back seat now. Its index settled at about 111 points, the lowest level in two weeks. The index has dropped almost 0.6%. The intraday corridor for the index is seen between 110.6 and 111.5.

The US dollar is trading lower on Tuesday because yields of US Treasuries went down, thus giving brief relief to stock markets. The pound sterling and the euro have grown 0.45 and 0.5% respectively. The yen retreated from the landmark level of 145.

The red-hot data on the US factory activity calmed down investors, though the Fed’s policymakers insist on sharp rate hikes as a counter-measure against inflation.

Federal Reserve Bank of New York John Williams said that despite signs of cooling down, the core CPI remains elevated. This assured the Fed to go ahead with aggressive monetary tightening.

Later on Tuesday, the market will digest remarks by other Fed’s policymakers such as Philip Jefferson, Loretta Mester, Mary Daly, and Laurie Logan.
The Canadian dollar retreated today. The USD/CAD pair is creeping upwards following a rally on Monday. The currency pair is trading at around 1.3649 within the intraday corridor between 1.3570 and 1.3710.

The loonie opened the week with confident gains amid the US dollar’s weakness and ahead of the highly-anticipated OPEC summit. The cartel and its allies are holding the summit on Wednesday and are likely to scale down their oil output by more than 1 million barrels a day. Some participants might decide on extra output cuts.

Commodity markets are set to trade under high volatility until the summit.


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00:00 INTRO
00:25 S&P500
01:23 UK
01:35 QUOTES
02:11 США
02:53 TESLA
03:20 USDX
04:03 QUOTES
04:38 USD | CAD
04:57 OPEC
05:30 OIL
05:49 BTC | USD
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