🎲Don’t fight the Fed🔫

The equity market fell broadly as market participants hoped the Fed would soon stop its interest rate hike. However, major analysts have called for “sell the rally”. After all, the Fed will be back on centre stage and could repeat its hawkish stance by igniting the narrative of more rate hikes on the horizon. 

This is likely through its commentary to push interest rates higher, which had fallen for the past week, potentially heightened borrowing costs and inflation again. 

We are seeing S&P 500 and Nasdaq rolling down from their high as they struggled to break out of their long-term resistance downward trend. 

💰Ford: Following Tesla’s playbook💸

The legacy automobile giant had cut prices for this Mustang Mach E electric vehicle to raise demand for its EVs. Upon price cut, one should see the Mac Es qualify for the $7500 purchase tax credit, which took effect in 2023 as part of President Biden’s Inflation Reduction Act. 

This comes as Tesla uses its pricing power to slash prices and boost demand in an increasingly challenging EVs market, as the cost matters to ordinary consumers. One good news is that Ford is also experiencing heightened demand for its EVs as it seeks to reduce customer wait time by boosting production. 

📮What are our dishes today? 📖

At 9.30 pm, we will receive the Employment Cost Index (QoQ0 for the fourth quarter. We should see it moderating to 1.1% from 1.2% in the prior period. This will help in the inflation-cooling narrative. 

The CB Consumer Confidence index for Jan 2023 will arrive at 11 am. We anticipate it will remain high at 109.0, an increase from 108.3 in the previous period. This will support a soft landing story as consumer spending powered more than three-quarters of the US economy. 

It is 31 Jan, Tuesday, 8.55 am in Singapore and 7.55 pm in New York. While it has been a red day for the market, we are hoping for a moderate profit-taking session as we await the latest FOMC update. 

From your lovely newsdesk friend, 

Pika Nat.