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11.01.202210:36 Forex Analysis & Reviews: Weekly US market review for January 11

Exchange Rates 11.01.2022 analysis

S&P500

The US market plummeted in the first week of 2022.

Notably, the major US market indices showed record gains in 2021. The Dow, the NASDAQ, and the S&P500 rose from 20% to 25%. This is a very strong performance for the US market. It should also be noted that in 2021 the main indices also showed an increase of around 15%. From the lows in the first pandemic wave in March 2020, the S&P500 index has gained more than 100%. At the end of 2021, many major US banks warned investors that they should not expect the same positive results from the market in the new year. Most experts predict that the indices will rise by no more than 10%, or even collapse by the end of the year. The Fed's already announced tightening of monetary policy is contributing to this. The Fed is now reducing its liquidity injections into the markets at the rate of 30 billion a month and will completely phase out its growth support programme as early as March. Some experts expect the first Fed rate hike also in March. The US 10-year Treasury yields have already risen to 1.76% in the first week of the year. This is the highest level since spring 2020.

US indices for week:

The Dow stays in the range of 36,650 – 36,070. It fell by 580 points or 1.5%.

The NASDAQ remains in the range of 15,720 - 14,940. It dropped by 780 points or 4.5%.

The S&P500 is trading in the range of 4,780 – 4,670. It lost 110 points or 2.5%.

Outlook:

The Dow is likely to remain in the range of 35,600 - 36,500.

The NASDAQ is likely to stay in the range of 14,500 - 15,500.

The S&P500 is expected to be in the range of 4,600 - 4,750.

The US market is under pressure from too high stock prices and an approaching Fed rate hike.

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Jozef Kovach,
Analytical expert of InstaSpot
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