On Monday, stock prices advanced as investors looked ahead to a busy week that will include midterm elections for members of Congress and critical inflation data that will be released later in the week.
The Dow Jones Industrial Average finished the day at 32,827.00, up 423.78 points, or 1.31%, from its previous level. The S&P 500 index rose by 0.96%, reaching 3,806.80. After fluctuating between gains and losses early in the session, the Nasdaq Composite ended the day up 0.85% at 10,564.52 points. The three major averages registered a positive day for the second consecutive time.
After the recent drops, the Bloomberg Dollar Spot Index didn’t experience much of a change. The index went down by 0.4% on Monday, adding to the previous day’s loss of 1.7%, which was the index’s worst single-day performance since March 2020.
Elections for the Lower House of Congress
The midterm elections that will take place on Tuesday will decide which party will control Congress, which will dictate the course of future expenditures. The Democrats presently hold a majority in the Senate and dominate the House of Representatives.
A Democratic president coupled with a Republican or split Congress has traditionally generated above-average returns for investors. A potential deadlock that could result from the midterm elections could be seen as favourable by investors.
On the subject of the economic data, investors are looking forward to the release of the consumer price index report on Thursday in the hopes that it would provide additional insight into how far the Federal Reserve needs to go to drive inflation down. If the data is strong, investors may conclude that the current trend of steadily rising interest rates will not be reversed very soon.
After an increase in withdrawals triggered when competitor Binance Holdings Ltd. announced plans to sell all of its tokens, the value of FTX’s token has fallen below a critical level of $22, where the price consolidated mostly yesterday. Changpeng Zhao, the CEO of the leading cryptocurrency exchange Binance, announced Sunday that the bourse intends to sell its about $530 million holding of FTT, the native token of Sam Bankman-FTX. Fried’s Later after that, Caroline Ellison, the Chief Executive Officer of Bankman Fried’s trading house Alameda Research, proposed purchasing all of Binance’s FTT tokens for the price of $22.
The price of the FTT token has dropped below the $15 price level, and the path of the least resistance seems skewed to the downside. The sell-off in the FTT token has made the whole industry vulnerable again, and major crypto titans like Bitcoin and Ethereum are out of balance as well and moving lower.
If the rout in the FTT token continues or a major blow-up takes place in FTT, we could easily see the BTC price coming under further selling pressure and the price re-visiting the price level of 15K or even lower.
During the past three months, Zhao and Bankman-Fried have been engaging in a spat on Twitter over various topics, including lobbying US legislators and claims of frontrunning deals. They have been trading insults on Twitter. In a series of tweets published on Sunday, Zhao first refuted that selling FTT was a move against a competitor, despite the fact that a later statement implied that Zhao was dissatisfied with FTX.