New week starts with a lot to look out for

Traders are awaiting this weeks data heavy hitters

The S&P 500 gained on Monday as investors anticipate fresh economic reports on inflation and an interest rate decision from the Federal Reserve later this week.

Energy companies led the gainers as oil prices were lifted by calming worries about energy needs.  China, the world’s biggest oil importer, moved farther away from its zero-Covid goal. Beijing stated intentions to suspend tracking some travel activities, a move that might lessen quarantine procedures for tourists to vulnerable Covid zones.

Technology stocks, which overall lost 3% last week, fought off an extending jump in Treasury rates. These rates increased on Monday ahead of an important week for bond investors, with the publication of US inflation data and a policy decision by the Federal Reserve. The Fed is likely to set the tone for markets over the next few months.

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The Fed is mostly expected to issue a 50 basis points interest rate boost on Wednesday, slowing down from four consecutive 75 basis point hikes. Fed also strives to reduce decades-high inflation without sparking a recession. Economists anticipate that the consumer price index (CPI) grew 0.3% in November and 7.3% overall in the last 12 months, compared with 0.4% and 7.7% in the preceding month, respectively.

However, many think CPI isn‘t likely to affect the Fed’s monetary policy proposals. Many are anticipating the US central bank will delay the pace of rate hikes, but imply a higher for longer interest rate regime.

Following Microsoft’s agreement to purchase a 4% share in the London Stock Exchange Group, Microsoft Corp stock climbed 1.82%, helping to lift each of the three major indexes. S&P 500 rose to 3,989.70 by 55.32 points which is a 1.41% gain. Dow Jones was up 1.58% to 34,005 which is a 528.58 point increase. NASDAQ rose the slightest of the three to 11,143.74 which is 139.12 points or +1.26%.

Dollar makes a turnaround against most of its pairs

The US dollar started the week in a bad position, but things turned around during the American session. By the end of the day, it had made some gains against its major rivals, but not all of them.

After going as high as 1.0580, the EUR/USD pair settled at around 1.0520. The GBP/USD pair trades around 1.2250. It hasn’t been able to go above 1.2300, even though UK data have been mostly good. The Trade Balance for October showed a deficit of £14.476 billion, but the GDP rose by 0.5%, which was better than the 0.1% drop that was expected.

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The Australian dollar fell a little bit against the US dollar, and AUD/USD is now around 0.6740. The USD/CAD pair lost some ground and ended up at 1.3636. This was because rising oil prices helped the Canadian dollar. The price of USD/JPY is around 137.80.

Oil gets a breather as it rebounds from the bottom

Brent crude finished at $77.99 a barrel, up $1.89, or 2.5%. The global oil benchmark plunged $9.47, or 11%, to $75.14 last week, a level not seen since December 23rd, 2021.

WTI for January delivery finished up $2.15, or 3%, at $73.17 a barrel. The benchmark for U.S. crude closed last week down $9.28, or 11.6%, representing the lowest performance since the week ending March 25th. Last week’s WTI session low was $70.11, a level not seen since December 21st, 2021.

Oil prices were supported by the continuing suspension of a pipeline that transported Canadian heavy crude to the US Gulf Coast. There was no estimate for how long it will take Canada’s TC Energy Corp to clean up and restart its Keystone oil pipeline. This was the worst US crude oil spill in almost a decade, which occurred last week. Exports from Russia’s Black Sea ports were stopped because of a storm in the area, which drove up prices as well.

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Gold price was off to a bad start this week as well. It hit a low of $1,777.68 after rising to a high of $1,797.46. The price of gold is down by about 0.96%. Silver is almost copying gold again with a similar decline by 0.9% to $23.5.