Market development depends on decision - Economics
Market development depends on decision - Economics
stocks, precious metals and cryptocurrencies have been trot in the last three weeks of 2023, and all eyes are now aimed at the next meeting of the Federal Open Market Committee (FOMC), which takes place in 11 days. On Friday, the Governor of the US Federal Reserve, Christopher Waller, said that he was promoted by a quarter of the FOMC meeting. Analysts believe that the current market movements will depend on the result of the next Fed meeting.
The markets are still excited before the fed session despite the rally of stocks, cryptocurrencies and precious metals in 2023
On Saturday, January 21, 2023, at 2:45 p.m. Eastern Time, the global market capitalization of cryptocurrency increased by 5.87 % compared to the previous day and was around $ 1.06 trillion. The leading crypto-asset, Bitcoin (btc) , has risen by 11.63 % in the past seven days. The second digital currency in relation to the market evaluation, ether (eth) this week rose to the Greenback by 8.33 % this week. The increase in the value of these two crypto-assets has also increased the US dollar value of the thousands of digital currencies below bitcoin and eth .
The day before, on Friday, January 20, the stock markets closed the day in the green. The four most important benchmark shares (S&P 500, Dow Jones, Nasdaq and Russell 2000) ended the day between 1 % and 2.66 % higher compared to the US dollar. The Nasdaq Composite was the highest with an increase of 2.66 %, the S&P 500 rose by 1.89 %, the Russell 2000 Index (RUT) rose by 1.69 % and the Dow rose by 1 % on Friday. US shares have recorded the second win of winning in a row this year. The small cap share market index Rut has increased by 7.1 % this year, whereby small cap shares listed the stock race in 2023.
precious metals have also been well beaten, whereby a really gold is traded $ 1,927.30 per unit and silver is traded for $ 24.01 per ounce. Like cryptocurrencies and stocks, precious metals recovered in 2023 and compensated for the losses of December 2022. The gold enthusiast Peter Schiff believes that the yellow precious metal price will increase this year. "Gold is now being traded over $ 1,934, the highest price since April 2022", according to Schiff tweeted on January 19. "However, gold shares have not even overcome the last week. In fact, gold shares have to rise by 30 % from here just to get back to where they were traded in April 2022. This sale may not take long," he added.
Speaking of to Kitco News, Edward Moya, a senior market analyst at Oanda, explained that gold prices will remain the same until the Federal Reserve is session in February 2023. "It will be restless," said Moya. "Until the session of the FED on February 1, I am neutral to gold. The greatest resistance is $ 2,000. But I would be surprised if we would move over $ 1,950. We will probably consolidate here until the Fed session," added the market analyst. Market analysts and macroeconomic experts have no idea what the fed at the fomc session. Some believe that an aggressive tightening plan will continue, while others expect the Fed to become more relaxed and change with a "gentle landing".
The bid administration and the economist of the White House, Heather Bouthey said Reuters that the current leaders do not expect a recession. "The steps were taken and it looks as if we are in a very good position to have this gentle landing that everyone is talking about," emphasized Bouthey. On Friday the governor of the US Federal Reserve, Christopher Waller at a conference of the Council on Foreign Relations in New York told that he advocated a lower rate increase than the previous seven. So far, the FED has carried out seven interest rate increases in 2022, two of which were half a point and five increases by three quarters. Waller can imagine an increase of a quarter of the point at the next FOMC session next month.
"I currently prefer an increase of 25 basis points at the next meeting of the FOMC at the end of this month," said Waller of the press. "In addition, we still have a considerable way to reach our inflation goal of 2 percent and I assume that I will support a further tightening of monetary policy," added the Fed Governor.
It is very likely that all three large markets (precious metals, cryptocurrencies and stocks) will react in one way or another after the next decision of the Fed. Many believe that the decision of the next FOMC session will completely depend on the inflation indicators. US President Joe Biden tweeted over the US economy over the weekend because he believes that the country is on the way to relaxation. "The annual inflation has dropped six months in a row and the gas has dropped by $ 1.70," said Biden tweeted on Saturday morning at 10:25 a.m. Eastern time. "We successfully move from economic recovery to stable growth," added Biden.
What do you think the result of the next FOMC session will look like and how will you think it will influence the current market developments for stocks, precious metals and cryptocurrencies? Share your opinion on this topic in the comment area below.
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