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Traders await Fed’s decision next week

US markets today have been showing all kinds of results. Among others, oil seems to be oversold the most.

Stocks close the week in the red after two weeks of gains

Friday was a mixed day on Wall Street as investors evaluated economic data and anticipated a possible 50-basis-point interest rate rise by the Fed. Next week, the Federal Reserve will have its policy meeting. In December, consumer mood increased, but inflation forecasts fell to their lowest level in 15 months.

Next Tuesday’s release of November statistics on consumer prices will give additional insight into the central bank’s intentions for monetary tightening. Lululemon Athletica fell 13% after the Canadian sports gear manufacturer released lower-than-expected revenue and earnings for the Christmas quarter.

The major indices on Wall Street have declined this week, after two consecutive weekly increases. Fears of a likely recession next year owing to protracted rate rises by the central bank weigh hard on markets.

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The US stock market broke its current losing streak for a day on Thursday. Data revealed a slight increase in new unemployment claims last week, indicating a weakening labor market. The week however ended in the red. The S&P 500 closed at 3,944.89 points, down 0.48%.

The Nasdaq declined 0.3% to 11,038.67 points, while the Dow Jones Industrial fell 0.63% percent to 33,555 points. Of the 11 S&P 500 sector indexes, seven decreased, leading with energy down by 1.76%, followed by a 0.55% loss in health care.

Dollar ended the week with mixed results

The dollar rose versus the euro on Friday as US producer inflation data for November came in somewhat hotter than anticipated. This boosted the argument for the Federal Reserve to continue raising interest rates, albeit at a slower pace. The US producer pricing index (PPI) came in at 7.4% last month which is more than the 7.2% expectation. Previous levels were 8.1%, which makes this a clear decrease overall 

The euro was briefly on course for a third consecutive week of gains. It however, couldn’t hold the ground and closed with a 0.25% loss at $1.053. The Aussie gained 0.4%.

The British government’s announced measures meant to protect London’s position as one of the world’s most competitive financial centers. The pound surged to a four-day high of $1.2273, an increase of 0.3%.

The oil price cap seems to have traders glued to the sell button

West Texas Intermediate crude for January delivery finished down 44 cents, or 0.6%, at $71.02 per barrel. The benchmark for US crude closed the week down $9.28, or 11.6%, representing the lowest week since the week ending March 25th. WTI’s session low was $70.11, a level not seen since December 21st, 2021, and a mere penny above the crucial $70 support level.

Brent crude for February delivery traded in London finished down 5 cents, or 0.07%, at $76.10. The global crude benchmark fell more than $9.47, or 11.0%, for the week. Brent’s intraday low was $75.14, a level not seen since December 23rd, 2021, and only pennies above the crucial $75 support level.

More to read: US bond yields remain pressured

The market seems to be showing the Russian president a different opinion about the price cap, which he called “stupid“. Chinese refiners appear to be conducting business as normal, as they continue to purchase Russian crude oil and disregard the price cap set by Western nations. China’s independent refiners are witnessing the largest discounts for Russia’s ESPO crude in months due to sluggish demand.

Gold edged slightly higher with Friday’s closing bell. The yellow shiny metal is priced at $1,795.21 which is a 0.34% increase. It’s silver brother reacted quite a bit more, rising 1.73% to $23.648.

Tomáš is a financial reporter with US markets as his main field. Tomáš is an aspiring author and entrepreneur aspiring to help people get better in financial knowledge.


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