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06.05.202210:06 Forex Analysis & Reviews: US stock market on May 6, 2022

Exchange Rates 06.05.2022 analysis

S&P500

The US market is a good buying point. Nonfarm payrolls will be published today.On Thursday, main US stock indices edged down. The Dow dropped by 3.1%, the NASDAQ lost 5%, and the S&P500 fell by 3.6%.The S&P 500 is trading at 4,147. It remains in the range of 4,120-4,180.The market fell hard yesterday. The NASDAQ dropped as much as 5%. There was no specifically terrible news. The yield on 10-year treasuries rose to 3% p.a. The fall in the market was a delayed effect on the Fed's decision to raise the rate, on the promise to raise it at the next meeting as well, and on the start of a monetary supply reduction at a rate of at least $90 billion a month. The market rallied strongly on Wednesday, but the big players decided to use this increase to sell. Of course, the market does not look very optimistic right now. However, the buying point right now is about 15% below the S&P500 high at the beginning of the year. Therefore, it is possible to buy. Yet the US economy itself remains in strong shape. The labor market is strong. So far, it is a correction rather than a real downward trend.Oil is holding above $110. Brent is trading at $111 on Friday. EU countries are firm in their plans to sharply cut purchases of Russian oil in the coming months. This will be specified in the EU's 6th sanctions package against the Kremlin. As for gas, the situation is more serious. These days, however, construction of an LNG terminal in Wilhelmshaven has started at an accelerated pace. The launch is planned for as early as 12 months from now. The aim is to drastically reduce the purchase of Russian gas.

The weekly unemployment report was published. The number of applications rose by 200 K. The long-term unemployment rate was around 1.4 million.The jobs report for April is due out today. It is expected to grow by 400K.The US dollar index is trading at 103.90. The dollar hit its highs for the year again on a falling stock market.The USD/CAD pair is trading at 1.2860. It remains in the range of 1.2700-1.3000.The US market is down, but has not surpassed the lows of the year.UN Secretary General Antonio Guterres said that up to 500 civilians from Azovstal and Mariupol had been rescued. A second rescue operation is now being attempted.Despite Putin's public order to stop attacking Azovstal, heavy shelling of the area has been going on for two days, despite the civilians remaining under the rubble. Russian forces have continued to attack almost the entire line of contact with Ukrainian forces for several days now. Overall, the conflict is in a positional phase. Now everyone is waiting for Putin's statements on May 9 about the Kremlin's further plans in Ukraine, as it is unlikely to reach the Donetsk and Luhansk oblast lines by this date.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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