The U.S. futures and oil prices experienced a slight decline.
Anticipation is high for the Federal Reserve to raise the federal funds rate to its highest level since 2001. Investors are hoping that this will mark the end of the tightening cycle as inflation has been cooling since last summer. The federal funds rate began the year at virtually zero.
The powerful Politburo of the ruling Communist Party is convening this week, raising hopes for additional support for the slowing economy. Although reports suggest this may be unlikely, the country’s economic planning agency has disclosed measures to encourage private investment in sectors such as transport, water conservancy, clean energy, new infrastructure, advanced manufacturing, and modern facility agriculture, according to Xinhua News Agency.
Meanwhile, the Bank of Japan is holding a policy meeting this week, but no major changes to the country’s ultra-lax monetary stance are expected.
The Nikkei 225 index in Tokyo rose by 1.2 percent to 32,700.94, while the Hang Seng in Hong Kong dropped over 400 points to 18,642.40.
In Seoul, the Kospi gained 0.7 percent to 2,628.53, and Australia’s S&P/ASX 200 shed 0.1 percent to 7,306.40. The Shanghai Composite index slipped 0.1 percent to 3,164.16.
The SET in Bangkok increased by 0.1 percent, while the Sensex in India decreased by 0.2 percent.
After a previous slide, Wall Street stocks found stability on Friday.
The earnings reporting season is gaining momentum, with a majority of companies reporting better-than-expected results.
The S&P 500 saw a slight increase of 0.1 percent, reaching 4,536.34, marking its eighth winning week out of the last ten. The Dow Jones Industrial Average also had a minimal increase of less than 0.1 percent, reaching 35,227.69, its tenth consecutive gain. The Nasdaq composite slipped by 0.2 percent to 14,032.81, following a significant loss the previous day.
The stock market has performed well this year, with the benchmark S&P 500 up by 18.1 percent, defying predictions of a recession. It has remained resilient despite higher interest rates aimed at reducing inflation, and there is hope that it will continue to thrive during the Federal Reserve’s rate-hike campaign.
It is widely expected that the Federal Reserve will raise the federal funds rate to its highest level since 2001, but there is hope that this will mark the end of the cycle as inflation has been cooling since last summer. The federal funds rate began last year at virtually zero.
This week, Alphabet, Meta Platforms (parent company of Facebook), and Microsoft, three of the leading companies responsible for most of the S&P 500’s gains this year, will be reporting their earnings. Expectations are high, as these stocks have all seen over 35 percent growth so far in 2022.
The size and influence of these top stocks on the market have prompted Nasdaq to rebalance its Nasdaq 100 index, reducing the impact that some stocks have on the overall index. The seven stocks in question, which include Amazon, Apple, and Nvidia, have collectively been trading with stock prices 44 times higher than their earnings per share over the last 12 months, according to Savita Subramanian, an equity strategist at Bank of America.
In other trading on Monday, U.S. benchmark crude oil declined by 37 cents to $76.72 per barrel on the New York Mercantile Exchange, following a gain of $1.42 on Friday. Brent crude, the basis for international trading, also decreased by 37 cents to $80.70 per barrel.
The dollar weakened against the Japanese yen, falling to 141.39 yen from 141.68 yen. However, the euro strengthened, rising to $1.1146 from $1.1128.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.