S&P 500 dips below 4,800 pending FOMC Minutes

• The S&P 500 was down modestly, but is trading within recent ranges below 4,800 ahead of the Fed Minutes release.
• Growth continues to underperform, meaning the Nasdaq 100 is performing poorly while the Dow is holding up better.

American stocks they operate mixed in the period prior to the publication of the Minutes of the last Fed meeting in December at 19:00 GMT on Wednesday. The S&P 500 is trading slightly lower just below 4,790, but continues to trade within the recent ranges of 4,760-4,820. Tech / growth stocks continue to underperform, despite long-term US bond yields taking a breather from their recent winning streak. As a result, the Nasdaq 100 was down 0.5% on Wednesday and is trading in the 16,200 region having previously tested 16,100. The Dow, meanwhile, continues to outperform amid underlying offering in “value” equity sectors such as energy, industrials and materials. The index rose roughly 0.25% on Wednesday again, a test of the 37,000 level (which would mark new all-time highs) is quite possible.

So-called value stocks continue to perform well in the wake of the recent rally in long-term bond yields, which appears to have signaled positivity about the state of the US economy and its outlook for 2022. “Value ”, Sometimes also referred to as income-generating stocks or cyclical stocks, disproportionately derives its assessment from current earnings rather than expectations of future earnings growth. That means its price is more sensitive to perceptions about the strength of the economy (which long-term bond yields encapsulate well).

A much stronger-than-expected estimate of the change in US private payrolls in December from ADP failed to affect stocks, bonds, or currency markets for that matter. Markets appear to be much more focused on the forthcoming release of the Fed Minutes. Recall that at the December meeting, the US central bank doubled the pace of its QE cut and indicated that three hikes were possible. rates in 2022. The minutes should shed more light on the thinking behind this decision, as well as opinions on things that are happening. yet to be decided / announced, such as the Fed’s plans to eventually reduce the level of its bond holdings.

Technical levels