Global stock indices and forex pairs are trading mixed amid subdued market sentiment on Friday. Treasury bonds rose after trading resumed after Thanksgiving in the US. European stock indices remain stable. Futures contracts on the S&P 500 and Nasdaq 100 indices rose slightly after recent comments from Federal Reserve officials who supported a slower pace of interest rate hikes.
This week, we have heard several speeches by Federal Reserve officials who felt that slowing the pace of rate hikes would probably be more appropriate soon, as keeping aggressive policy at the same level could seriously hurt the country's economy. This supports stock indices and allows them to hold at current levels.
Market participants are also seeking hints not only about the next rate hikes but also about how far the policymakers may go with it next year to curb raging inflation. As some experts point out, it is just as important for the public to pay more attention to how high the interest rates may be raised rather than the pace of further interest rate hikes.
Stocks of Chinese tech companies showed declines as investors compared the recent rise to the rise in Covid-19 cases. However, the outlook for Chinese markets is improving, despite the current outbreak. This is due to the US-China negotiations and the lifting of some of the restrictions that have been imposed on the technology sector.
In Japan, the 10-year bond yield rose by one basis point to 0.25%, the top end of the central bank's target range, after data showed Tokyo's inflation accelerated to its highest level in 40 years.
Oil prices are falling for the third week, and the European Union is assessing a higher-than-expected price ceiling on Russian oil supplies. Concerns about slowing global growth are jeopardizing the outlook for energy demand. Gold shows a modest weekly gain.
As for the S&P 500 index, yesterday's surge was successful. Currently, bulls should protect the support of $4,000. As long as the index is trading above this level, the demand for risky assets is expected to persist. This may strengthen the trading instrument and return the level of $4,038 under control. If the price pierces $4,064, this is likely to trigger an upward correction to the resistance of $4,091. The next target is located in the area of $4,116. If the price declines, bulls will have to protect the psychologically important level of $4,000. If this level is broken through, the trading instrument may be pushed down to $3,968, opening the way to a new support level of $3,942.