BANK OF JAPAN’s ECONOMIC DILEMMAS

A potential rise in oil and commodity prices will test the interconnectedness of global geopolitical events with corporate performance and BOJ’s monetary policy and its effectiveness.

TUESDAY TECHNICALS

In the near term, we expect equity markets to remain choppy and range bound with a moderate upside. Areas that have underperformed this year, including emerging market equities may have a catch-up Santa rally.

OIL : RISK PREMIUMS OFF

Some oil traders view the Israel-Gaza conflict as a significant political event that has yet to demonstrate any tangible risks to the oil trade. Applying a daily war premium to oil due to this situation is seen by some as unwarranted.

MARKET FOCUS THIS WEEK

The ongoing Israeli-Hamas conflict is heightening investor concerns about rising geopolitical risks in financial markets and if this conflict draws in other countries, especially Iran. As long as the war remains relatively localized, investors are largely keeping an eye on the conflict and a finger on the Sell button.

MARKET TECHNICALS: 200-DMA SIGNIFICANCE

Keep your eye on the 4,080 level for the S&P 500. If it can hold at or above that level, there could be another buying opportunity. Else simply give up buying stocks till the fundamental indicators signal equities are nearing the end of their downturn.

TAKE FEAR SERIOUSLY

For those seeking insights into when stocks may halt their decline, paying attention to macroeconomic data, bond market dynamics and the dollar’s performance. These fundamentals can signal when equities are nearing the end of their downturn, serving as valuable guides for investors.

MARKETS FOCUS THIS WEEK

As the market navigates economic growth and monetary policy concerns, the impact of rising interest rates and technical breaches in key indices continues to make investors cautious. Foreign investors might flock to the U.S. as a safe haven during such times, potentially causing interest rates to decrease and the dollar to strengthen. In such conditions, commodities, oil stocks, and gold could serve as effective hedges for investors

S&P 500 TESTS KEY TECHNICAL SUPPORT

The S&P 500 has dipped below the critical 200-Day Moving Average (DMA) and is approaching significant technical support at 4180. Recent inflation data suggests the possibility of further Federal Reserve rate hikes. Additionally, the influence of major tech companies in the S&P 500 poses a substantial threat impacting the S&P 500 to potentially fall by as much as 10% to 3900 thereabouts.

MARKET FOCUS THIS WEEK

Overall, the market participants are closely watching key important levels for the S&P 500, rising treasury yields, the Israel-Hamas, gold, crypto and oil prices. The trend is clear for S&P 500, the Nasdaq and the Dow, it’s down. However an impending rout is not visible in commodities yet.

MARKETS THIS WEEK

Impact of rising interest rates and technical breaches in key indices shows the market remains cautious, balancing concerns over economic growth and monetary policies. The Israel-Hamas conflict has elevated gold, crypto and oil prices. However a clear trend is not visible in either of the three yet.