S&P500
Number of omicron cases as of the morning of January 26
The US market is getting ready to rally ahead of the Fed meeting.
The main stock indices dropped on Tuesday. The Dow Jones shed 0.2%, the NASDAQ Composite declined by 2.3%, and the S&P500 decreased by 1.2%.
The day's results do not fully reflect Tuesday's picture. In fact, the market showed a strong bullish reversal on the S&P500 for the second day in a row. The market fell much more than the day's result during trading, but by the end of the session the fall was reversed. The sentiment of the big players is changing from selling to buying. The market is forming a bottom.
On Wednesday morning, Asian stock markets were trading mixed. Japanese stock indices dropped by 0.4%. Chinese stock indices showed strong growth of 0.6%.
Oil climbs to the highs of the year. Brent is at $88.30.
The number of coronavirus cases worldwide keeps rising. On Wednesday, there were 3.3 million new cases around the world. In the US, there were 440,000 cases. France saw an increase of 500,000. Globally, mortality rates are kept almost at pre-omicron levels. Those vaccinated are almost 100% protected against severe outcomes of omicron.
The S&P 500 is trading at 4,356. It stays in the range of 4,320 – 4,390.
Microsoft net profit for the half year rose by 34% to $39bn.
Due to the pandemic, total air passenger numbers in 2021 will be 58% lower than they were in 2019.
The International Monetary Fund cut its world economic growth forecast for 2022 to 4.4%. Among the reasons are omicron, a tightening of policy by the world's main central banks, and high inflation.
General Electric posted an annual loss of $6.8bn. The company hopes to turn a profit this year.
Johnson & Johnson expects sales of its COVID-19 vaccine to increase by 46% this year.
Today everyone is waiting to hear what the Fed has to say about the fight against inflation and the prospect of a rate hike. The market will react to how soft or hard the anti-inflationary part of the text will be. In the event of a soft Fed stance, equities would move higher and the dollar would weaken or remain at current levels.
The US dollar index is trading at 96.00. It is likely to remain in the range of 95.40-96.50. The dollar rises slightly ahead of the Fed. However, Fed decisions could completely change the picture by the close of the day.
The USD/CAD pair is trading at 1.2600. It is likely to stay in the range of 1.2500 - 1.2700. The pair is under pressure from a new rise in oil. But in case of a general dollar rally after the Fed meeting in the evening, there could also be a strong surge.
The market is waiting for the Fed meeting. The stock market is ready to move higher, especially with the Fed's soft stance on inflation.