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After Monday’s losses, the Dow, S&P 500, and Nasdaq opened flat; speakers from the Fed and China will be the main topics of discussion.

2022/11/30 (Nov 30th, 2022 1:03 am)
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9.35 a.m.: The focus is on China’s upcoming action.

The Nasdaq Composite had increased 12 points or 0.1% to 11,062 points just after the market opened, while the Dow Jones Industrial Average had fallen 18 points to 33,831 points and the S&P 500 was unchanged at 3,964 points.

According to Fiona Cincotta, a market analyst for Forex.com, US stocks were poised for a stronger opening amid growing rumors that unrest in China as a result of COVID restrictions would prompt authorities to act more quickly to lift restrictions.

Beijing did not make any significant changes to the present policies, but it did state that it will speed up the immunization schedule for older residents, according to the woman.
In addition to China, Cincotta pointed out that stocks were gaining from the belief that the Federal Reserve could slow the rate of rate increases following its meeting in December, despite Fed speakers yesterday sending conflicting signals.

She said that while there is still work to be done to control inflation, there may be a cut in interest rates in 2019.

With investors continuing to monitor news about anti-government protests in China, US stocks are anticipated to open higher on Tuesday, regaining some ground lost after falls in the previous session.

In pre-market trading, futures for the Dow Jones Industrial Average increased by 0.1%, those for the S&P 500 by 0.2%, and those for the Nasdaq-100 by 0.4%.

According to Neil Wilson, chief market analyst at markets.com, “China and its COVID response are driving the headlines,” citing the Hang Seng’s 5% increase in Hong Kong following a move by Chinese health officials to encourage the elderly to get immunized against COVID-19.

However, markets are still concerned about China’s anti-government demonstrations, particularly in light of the question of whether the most populous nation in the world will uphold its strict zero-covid policy in the face of widespread public opposition.

Wilson noted that there is a sense that the direction of travel can only be towards easing restrictions sometime in the new year. “There is unease about supply chain implications from ongoing restrictions and rising cases, as well as concern about what protests against the government could mean for risk,” Wilson said.

He continued, “When precisely that will be depends on a number of factors, not the least of which is the vaccination rate, but it seems likely that the regime will have to give up at some point.”

Closer to home, the most recent remarks from US rate-setters were definitely hawkish, which on Monday knocked on share prices.

This supports Wilson’s own prediction that inflation will be more persistent and that the Fed will need to maintain its current course for a longer period of time than the market currently anticipates.

It is also important to note that John Williams, the president of the New York Fed, emphasized that inflation was still too high and forecasted that unemployment could increase to 5% from 3.7% this month to 5% next year.

On the data front, the S&P Case-Schiller home sales data, due at 9.00am ET, and the US consumer confidence index for November, due at 10:00am ET today, will be closely watched.

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