Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

‘Very Challenging’, Indeed

By Swissquote Ltd (Ipek Ozkardeskaya)Market OverviewJun 23, 2022 07:07
uk.investing.com/analysis/very-challenging-indeed-200523891
‘Very Challenging’, Indeed
By Swissquote Ltd (Ipek Ozkardeskaya)   |  Jun 23, 2022 07:07
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Market optimism couldn’t survive Jerome Powell’s testimony yesterday, as he said that a recession is possible, and that calling a soft landing is ‘very challenging’ under the current circumstances.

More worryingly, Powell mentioned another risk: the risk of the Federal Reserve (Fed) not managing to restore price stability and allowing inflation to get entrenched in the economy.  

Major US indices closed the session slightly in the negative. The S&P 500 lost 0.13% and Nasdaq slid 0.15%. The US 10-year yield eased, however, as a sign that Powell’s testimony was already mostly factored in. The US dollar index eased.  

Powell will testify today, as well, but most of the negative pricing is certainly done by now. 

Finally falling? 

The barrel of American crude extended losses below $103 yesterday, as Powell’s speech pointed at a possible recession. The next important test for the oil bears is the $100 level. Many investors don’t expect a downturn in oil prices below this level, pointing at a tight global supply, and resilient demand. Joe Biden’s 3-month gas tax relief could only increase demand and have no material impact on the overall market trend.  

Other commodities suffer, as well, as the recession fear takes a toll on demand prospects and brings investors to liquidate their long positions in preparation for a further downside correction. iShares Diversified Commodity index fell below the 100-DMA for the first time this year, and a deeper decline is possible, given the risks of tighter monetary policies to the global economy. 

In this respect, the British FTSE index, which has a high concentration of oil and mining stocks, could lose its YTD advance versus its US peers.

‘Very Challenging’, Indeed
 

Related Articles

Ipek Ozkardeskaya
Inflation Expectations Soften By Ipek Ozkardeskaya - Aug 09, 2022

Stock markets kicked off the week mixed, the European markets were up yesterday, while NVIDIA (NASDAQ:NVDA) plummeted the mood in the US, sending Nasdaq slightly lower. NVIDIA...

‘Very Challenging’, Indeed

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email