Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Marketmind: The Fed's Thanksgiving tonic

Economy Nov 23, 2022 04:41PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: An eagle tops the U.S. Federal Reserve building's facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst/File Photo 2/2
 
US500
+3.09%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DJI
+2.18%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GS
+1.30%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
VIX
-5.98%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Jamie McGeever

(Reuters) - A look at the day ahead in Asian markets from Jamie McGeever.

The Fed gave U.S. markets a perfect pre-Thanksgiving tonic on Wednesday, which should keep risk appetite bubbling along nicely in Asia on Thursday.

Minutes from the Fed's Nov. 1 to 2 policy meeting showed that a "substantial majority" of policymakers reckon it will "likely soon be appropriate" to slow the pace of rate hikes as the economy adjusts to more expensive credit.

Markets welcomed this with open arms. The Nasdaq rallied 1%, the S&P 500 rose further above the 4000 mark to hit a two and a half month high and the Dow reached its highest level since April.

Dow Jones Industrials https://fingfx.thomsonreuters.com/gfx/mkt/gdpzqynenvw/DJI.png

In a clear sign that investors are firmly in 'risk on' mode, the VIX - Wall Street's 'fear index' of implied volatility - fell for a sixth straight day to a three-month low just above the long-run average of 20.0.

Bond markets, on the other hand, offered a more cautious take. Yes, yields fell, but curves went even deeper into inverted territory. Recession next year is a certainty, if you believe the bond market.

U.S. markets are closed for the Thanksgiving holiday on Thursday, and liquidity and activity will be light on Friday. This should allow Asian indicators and events to exert greater influence over local markets this week.

Bank of Korea vs Fed https://fingfx.thomsonreuters.com/gfx/mkt/znvnbejolvl/BOKvFed.jpg

Encouraging signs could come from South Korea. Although the Bank of Korea is widely expected to raise rates 25 basis points on Thursday to a decade-high of 3.25%, the end of the hiking cycle may not be too far away.

Especially in light of the latest smoke signals coming from Fed Towers in Washington.

South Korea's economy is losing momentum as higher living costs dent household income and demand. Economists at Goldman Sachs (NYSE:GS) say 2023 GDP growth will be only 1.4%, with interest rates peaking at 3.75% early next year before being cut in the fourth quarter.

Japan's purchasing managers indexes will show how business activity in the world's third largest economy fared last month. Manufacturing activity is its weakest in almost two years but the services sector is holding up better.

Another market tonic, perhaps?

Three key developments that could provide more direction to markets on Thursday:

- South Korea producer price inflation (October)

- South Korea interest rate decision (+25 bps expected)

- Japan PMIs (November)

Marketmind: The Fed's Thanksgiving tonic
 

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)
Aloysius Johnson
Aloysius Johnson Nov 26, 2022 5:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good
 
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