What happened to the US stock market yesterday?

US tech stock rose on Monday

Yesterday has been a negative day for Wall Street except for the Nasdaq.

The S&P 500 closed at -0.08%, the Nasdaq ended the trading session at +0.63% and the Dow Jones closed at 0.34%.

On Monday, the heavy tech index has gone up following the positive employment data report that could lead to a slow interest rate hike by the Federal Reserve.

Fed’s members’ hawkish speech has sent the US market down

Yesterday’s trading session has been impacted by the Federal Reserve’s member speech about monetary policy.

At the beginning of the day, all three major US indexes were in profit but at the end, two of them closed in a loss.

On Monday, US central bank officials from San Francisco and Atlanta branches have spoken about their expectations regarding the fed funds rate which is set to peak between 5 per cent and 5.25 per cent by the end of this year, up from its current level between 4.25% and 4.5%.

Investors are now waiting on the Fed’s next decision regarding the interest rate hike on 1st February which could be 50 or 25 basis points.

The decision will be taken considering the December consumer price index data, which will be released in two days, on 12 January 2023.

If the prices in December have risen less than in November then the Fed could think to slow down the pace of the interest rates hikes to 0.25%.

Today’s Jerome Powell is scheduled to speak

The Federal Reserve chairman, Powell will speak today at the Sveriges Riksbank International Symposium on Central Bank Independence in Stockholm, Sweden.

His comment is scheduled to start at 14:00 GMT.

During the same event, the World Bank is expected to publish its global economic prospects report.

Sentiment Indicator – Fear & Greed Index

The market sentiment is at 49 in the “Neutral” mode which is higher than a week ago when it was in “Fear” mode.



FedWatch Tool – FED rates probabilities

77.2% of investors are expecting the FED to increase the interest rates by 0.25% at the next meeting.

The remaining 22.8% are expecting a 0.50% rate increase.

The number of investors expecting a rate increase of 0.50% is a little bit higher than yesterday.

No other options are considered at this time.

The next FED meeting is on 1 February 2023.

Portfolio Update

I am monitoring the short positions on stocks and ETFs and I will act accordingly.

This will allow my portfolio to make a profit if the market drops.

My view remains bearish at the moment, based on the current economic situation and the current FED monetary policy.

I am expecting more downside in the upcoming days, however, I am aiming to make a profit regardless of the market direction.

If you are already copying my portfolio, please keep the copy open.

If you are thinking of copying me, now could be the right time, if you can invest for the long term (years).

Remember to copy the open trades to optimize the copy.

Remember to set the stop loss on the copy at the minimum level, so you don’t get stopped if there is a correction.

Thank you, everyone. Have a nice day!

Steps to follow to copy my portfolio automatically:

1. Create an eToro account here: https://federicamontella.com/go/etoro/

2. Verify your account and make a deposit of at least 200 USD (you can deposit in any currency, like GBP and EUR)

3. Go to my profile page: https://federicamontella.com/go/etoro-passionforprofit/

4. Start the copy (copy open trades and set the lowest stop loss possible, to allow some movement)

5. Enjoy, it’s all automatic. You will make passive income 24/7

Let me know if you have any questions.

 

Federica Montella

eToro Popular Investor

 

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Author: Federica Montella
eToro Popular Investor, food lover and blogger. Stock trader and Popular Investor at eToro. I am on a mission to find the best restaurants and food to eat.