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01.07.2022: US stocks gyrating due to same headwinds (S&P500, USD, CAD, Bitcoin)

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Hi, dear traders! Let’s discuss how US markets are trading on the first day of the month and the second half of 2022. The S&P 500 closed yesterday with the worst result since 1970. The index lost 8.5 trillion dollars in value. Nevertheless, investors cannot sigh with relief that the worst is beyond. The outlook for Wall Street is obscure.
Benchmark stock indices had another turbulent session yesterday and closed in the red. The Dow Jones shed 0.8%. The Nasdaq dropped 1.3%. The S&P 500 lost 0.9%. The indices traded lower in the New York pre-market. Important economic data is due later today, so investors could revise sentiment. The S&P 500 is likely to trade in the intraday corridor between 3,710 and 3,840.
Wall Street indices closed the tough first half of 2022 on a roller coaster. The gloomy picture was spoilt by data on personal spending for May which contracted for the first time. Such dismal data was accompanied by soaring inflation, geopolitical tensions, aggressive rate hikes, and the pandemic aftermath which pinned market quotes at multi-year lows. The S&P 500 has plummeted by 21% since early January. The Dow Jones has fallen almost 16%. The Nasdaq slumped 25%.
The picture mirrors alarming conditions in the US and in the global economy. Ominous signs of a slowdown in the global economy destroy any hope for a recovery in risky assets. Investors are trying to puzzle out how long the bear market might last. Thus, any positive news triggers a short-term rally in the stock market. Today, positive US PMIs could serve as a catalyst for moderate growth.
High-tech giants such as Microsoft, Apple, Amazon, and Meta traded lower in the American pre-market. However, Tesla shares rose 0.9% because the FCC authorized SpaceX to provide Starlink satellite internet to vehicles in motion. It is the key step for Elon Musk’s company to expand broad Internet services for commercial air companies, sea vessels, and trucks.
While Wall Street is in limbo, the US dollar is again flexing its muscles. Its index surged 0.73% to trade at 105.45. Judging by the pre-market, the index aims to rebound to the strongest level in 20 years or climb even higher. The intraday corridor for the US dollar index is defined between 105.3 and 105.9.
The greenback is again asserting strength following the best quarter since 2016. The reason is global risks and investors’ flight to safe haven assets.
The US currency finds support from the IMF. The lending institution reported that the greenback retained its reign as the most popular reserve currency. Its share in the global reserves amounts to 59% in the first quarter, like in the fourth quarter last year. The yuan’s share edged up to 2.9% from 2.8% a quarter ago. The share of the pound sterling increased to 5% from 4.8% a quarter ago and 4.7% a year ago. The euro’s share contracted to 20% from 20.6% previously.
The USD/CAD pair is heading sharply upwards amid the greenback’s rally. The currency pair climbed to 1.2910. It is likely to trade in the intraday corridor between 1.2920 and 1.2980. A flight to safe haven assets is again dragging the loonie down. The Canadian dollar lacks its traditional support from the oil market. Meanwhile, oil prices rebounded off lows due to disruptions in oil supplies from Libya and maintenance in drilling facilities in Norway. Brent futures rose 2.13% to 111.29 dollars a barrel. WTI added 2.33% to trade at 108.06 dollars.
In fact, such moves are just a bounce and oil prices have a long way to recover to recent highs. The oil market is overshadowed by fears that a recession could dent demand. Amid such fears, the USD/CAD pair is trading higher.

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