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Stocks drop, yields up as Fed hawks bash pivot hopes

18 November 2022 By Lachlan Meakin

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US equities declined modestly in Thursdays session futures were pointing to a steeper decline after Voting Fed member Bullard dampened hopes of a Fed “pivot” anytime soon, re-iterating the Feds determination to see inflation lower and downplaying one soft inflation report.

Stocks did recover during the session though as the “bad news is good news” narrative came into play after weak manufacturing figures were released, the Philly Fed manufacturing index coming in at -19.4 against an expected reading of -6. The S&P 500 perfectly bouncing off it’s 100 day moving average and rallying strongly to recoup most of the downside.

The US Dollar rallied modestly, with rising 10 Year treasury yields seeing the USDJPY break through and hold the 140 level.

BTCUSD took a pause today, ending the day practically unchanged after trading a narrow range in the 16000’s , with news out of the FTX collapse getting worse every day , holding these levels will be a real test of the tokens resilience and crypto bulls nerve.

Crude Oil prices tumbled once again today, with US crude back at one-month lows trading with a $81 handle before finding support at the October lows.

In the day ahead, US monthly option expiry is coming up, lately this has seen elevated volatility in equities markets, so something to watch out for. Otherwise, a very light calendar with really only ECB President Lagarde’s speech a possible market mover.

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