💎Is the Bear Here?💎

🕹Tech Stocks Fear the Heat🥊

The big tech is bearing the heavy brunt of the sell-off on Thursday as losses build throughout the trading session. Market participants are sinking into the reality of a less dovish Fed with the clock ticking towards lower bond purchases in the coming months. 

The S&P 500 and Dow had a relatively safer ride, although they were also going downhill. Dow had spent most of the days in green, supported mainly by banks (Pika World’s favourite), but the hard falling of Apple and Microsoft had forced the Dow to give up the gains. 

💵Short term interest rate Impact🔭

The rise in short term increase rate to combat inflation will slow down economic growth and hit economically sensitive Dow in the near term as it is still below its all-time high, around Nov 8. 

💣Central Banks Actions🏀

It is a busy week for central banks globally. Bank of England announced an increase of its benchmark rate to 0.25%. The ECB, while leaving its interest rate unchanged at -0.5%, signal its reduction in bond purchase too. 

🤼Labor market sentiment💼

Initial jobless claims rose above forecast to hit 206,000. However, it is not of great concern as the four-week average continues to fall to 203,750, indicating the lowest level since March 2020. Hence, it does support the Fed’s narrative that the labour market is healthy to see a less accommodative monetary policy. 

The market is likely to stay elevated in volatility, and downside risk maintains as investors re-assess their outlook projection and take profit for the year. Moreover, it is the quadruple witching today, which means heightened volatility across different assets such as index, index futures, stocks and their related options family. 

We hope you enjoy this quick read. Pika World wishes everyone a restful weekend ahead!

Cheers, 

Pika Nat.