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

Marketmind: Buy the dip? Or pray for Fed put?

EconomyJan 25, 2022 03:20AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A trader works on the trading floor on the last day of trading before Christmas at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., December 23, 2021. REUTERS/Andrew Kelly/File Photo

A look at the day ahead from Sujata Rao.

Bears are on the prowl in markets while a different sort menaces Europe's eastern flank.

It's probably futile to expect the Russian bear to retreat the way Wall Street bears did late on Monday, when sentiment turned on a dime, allowing the S&P 500 which was 4% in the red at one point, to close higher.

Clearly dip-buyers haven't entirely fled equity markets. Or was it a function of all those short Nasdaq positions, which suddenly found themselves in the money?

The impulse hasn't carried through, with Asia deep in the red and Wall Street futures down almost 2%. Option market readings are not reassuring either; trading in put options, used to place bearish bets, outnumbered bullish call options by 1.1-to-1 on Monday, apparently the most bearish that ratio has been since March 2020.

Away from markets though, the global economic picture isn't looking too bad. PMIs advance readings on Monday did show an Omicron-driven slowdown in December business activity but signalled a peaking in supply chain delays. South Korean GDP expanded at the fastest pace in 11 years and of the U.S. companies that have reported Q4 earnings, 77% beat forecasts.

In the middle of this market churn, the Fed starts a two-day meeting which may well be the last before a March interest rate liftoff. Many hope it will pay attention to the tightening in financial conditions such large equity selloffs inevitably cause. JPMorgan (NYSE:JPM) cite the robust earnings season to argue the bearishness is overdone. And after all, they add "the worst-case scenario could see the return of the Fed put".

Graphic: Nasdaq mktcap, https://fingfx.thomsonreuters.com/gfx/mkt/xmvjobazqpr/nasdaq%20mktcap.JPG Key developments that should provide more direction to markets on Tuesday:

-Singapore tightened monetary policy settings in its first out-of-cycle move in seven years

-South Korea's economy expanded at the fastest pace in 11 years in 2021

-Australia's core inflation flew to its fastest annual pace since 2014 in the December quarter

-Credit Suisse warns of Q4 net loss

-Germany IFO survey

-Emerging markets: Hungary central bank

-U.S. consumer confidence January/

-U.S. 5 year Note auction ($55 bln)

-U.S. earnings: General Electric (NYSE:GE), Johnson & Johnson (NYSE:JNJ), 3M, Xerox (NASDAQ:XRX), Invesco, American Express (NYSE:AXP), Verizon (NYSE:VZ), Microsoft (NASDAQ:MSFT), Capital One

European earnings: SEB, Remy Cointreau, Logitech (NASDAQ:LOGI), Ericsson (BS:ERICAs)

Marketmind: Buy the dip? Or pray for Fed put?
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other 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, don’t trash it.

  •           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. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. 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.
Comments (1)
George Jetson
George Jetson Jan 25, 2022 4:28AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
market will crash. one long , 6 month dip
 
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