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Friday, May 27, 2022

The S&P 500 tries to rally ahead of the Federal Reserve meeting

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The S&P 500 fell a bit early in the trading session on Tuesday but then attracted buyers with the legacy of the New York session. At the top I think there will be resistance and right now people are really watching what the Federal Reserve says tomorrow in its monetary policy statement. basically what people are going to try to see in the statement and in the subsequent press conference is the tone used towards the stimuli to see if it is protectionist and in favor of continuing to withdraw them. If he is in favor of continuing to withdraw stimulus, as much as people expect, then the effect on the northern stock market would be negative, while being a little protectionist would be reason enough for the S&P 500 to post a rally in the short term.

S&P 500 video 03/16/22

There are many factors out there suggesting that the S&P 500 needs to fall. For example, the very troubled United States is on its way to entering an economic recession and the pace at which the growth rate is evolving does not seem very promising to us. There are also concerns that US companies may have to revise down their earnings estimates, something that would likely hurt the value of treasury shares. So the summary for me would be that we are in the process of deflating the gigantic bubble that has been building for the last 13 years.

fundamentally the Fed has been buoying the markets with a lot of liquidity and if that cheap money starts to disappear the markets are likely to suffer.

To see all the economic events of the day, we recommend you visit our economic calendar.

This article was originally published on FX Empire

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