After yesterday, the main US stock indexes updated the absolute highs, today the indices are traded in a narrow range, maintaining a positive momentum.
It is likely that the news that North Korea has launched another ballistic missile, which, according to the leadership of North Korea, can reach any point of the United States, kept the markets from continuing growth. Experts confirmed that the launched missile had a higher trajectory. This launch may once again intensify tensions in the region and worsen the country's relations with the United States.
So far, investors' reaction to this news has been rather low-key. It is likely that they are waiting for a reaction from the administration of the US President. If aggressive statements follow, investors can again begin to withdraw funds into safe assets and sell some of the high-risk assets of the stock market. The tougher the statements from the US president, the stronger the stock markets can "shake".
If the reaction from the administration of the US president does not follow, then the growth in US stock exchanges will continue.
Investors continue to analyze positive economic data from the US, as well as information that the US Senate Budget Committee voted on Tuesday to adopt a tax bill proposed by Republicans.
Now we can assume that the bill will be approved on Thursday, when it will be put to the vote in the Senate. Republican leaders are confident that they will be able to get 50 votes needed to approve the bill.
At the same time, investors drew attention to the positive macro data received from the US on Tuesday. The index of consumer confidence in the US (according to the Conference Board version) rose in November to a new high for 17 years and amounted to 129.5 against 126.2 in October. The national housing price index in the USA increased by 6.2% in September (against + 5.9% in August) compared to the same period of the previous year, showing the fastest annual growth since June 2014. The growth of the production index (according to the Fed-Richmond data) was 30 in November (against 12 in October), the highest level since 1993.
The yield of 10-year US Treasury bonds rose to 2.338% from 1.328% on Monday.
As a member of the Board of Governors of the Federal Reserve Jerome Powell said yesterday during a hearing in the banking committee of the Senate, the Fed may move toward "normalizing interest rates". In his opinion, "if to wait too long for an increase in rates, the economy may overheat". Powell also suggested that US GDP growth in 2018 will be 2% -2.5%, and the unemployment rate will drop below 4%.
The data show that the growth of the US economy is accelerating towards the end of the year. Now investors are trying to understand how aggressively the Federal Reserve will be able to raise rates in the next year. The higher cost of borrowing makes the dollar and US assets more attractive for purchases.
Today, again, the rapid growth of volatility in the financial markets is expected during the American session, when important macro statistics from the United States begin to arrive, and Fed Chairman Janet Yellen (15:00 GMT) and FOMC member San Francisco FRB John Williams (at 17:45) start speeches.
If the data presented (GDP for the 3rd quarter (preliminary release), as well as the inflation index of spending on personal consumption of Americans) coincides with positive forecasts or will be stronger (3.2% GDP is expected to grow against 3.0% in the second quarter), then the dollar and US stock indices will react with growth.
At 19:00 (GMT) "Beige Book" with an economic review of the Fed the current situation in the US economy will be published.
The US stock market is expected to retain positive dynamics in the short term, if unexpected extraordinary events of a geopolitical scale do not follow.
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Support
levels: 23560.0, 23340.0, 23250.0, 22900.0, 22720.0, 22400.0, 22000.0, 21930.0
Resistance levels: 23900.0
Trading Scenarios
Buy in the market. Stop-Loss 23780.0. Take-Profit 23900.0, 24000.0, 24100.0
Sell Stop 23780.0. Stop-Loss 23910.0. Take-Profit 23560.0, 23340.0, 23250.0, 22900.0, 22720.0, 22400.0, 22000.0, 21930.0
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