Stock Market Today
The rally that began in the tech sector and lifted the stock indices out of their misery is also helping the US and European stock futures today. Traders are starting the week with a lot of optimism, but at the same time, caution is also the name of the game as many are sceptical about the current rally, and they are wondering if the rally will last or if it is nothing more than just a dead cat bounce.
The war in Ukraine and Russia could last longer than expected as the G-7 pledged to support Ukraine against Russia for as long as it takes. Traders hoped that the G-7 would come up with some political solution, and there may be an end to the ongoing tensions between Russia and the US allies. The tensions have caused the current chaos in the global stock market, which is one of the primary reasons for the soaring inflation. In addition to this, many do believe that worse is still to come, and this is because the soft commodity crisis hasn’t reached its peak level, and we have not seen a real panic among governments and consumers about the shortage of the grain supply. Once this panic reaches its peak level, we could see governments topping over in many of the countries in the developed and third world countries, and we believe that the situation is likely to take place soon.
Gold prices are likely to be sensitive this week as one significant development over the weekend at the G-7 meeting was the discussion about the plan to unveil a ban on Russian gold imports. The UK believes that the ban will profoundly impact Kremlin’s ability to fund its army in Ukraine. It is important to note here that the Russian Rubble, which was badly beaten down when the war started, has not only recovered its losses but has become one of the strongest currencies.
Brent and Crude oil prices are trading higher today after their sell-off last week. Traders believe that the path of the least resistance for oil prices is very much skewed to the upside in the short term, mainly because there isn’t supply to meet demand. In addition, Chinese oil demand hasn’t fully recovered yet, and once it is fully recovered, we are likely to see more pressure building up. Any sell-off in the oil prices remains an opportunity for many traders who always stand ready to bag bargains.
As for the US and Iran negotiations about the 2015 nuclear deal, the hope is that the conversation will begin once again this week, and the conversations will remain the primary focus among traders and investors as a sign of more oil supply coming on the market is likely to hurt the demand.
This week is dominated by central bankers; on Wednesday, Jerome Powell, Christine Lagarde, and Andrew Bailey will participate in a panel discussion at the ECB’s annual Forum on Central Banking in Sintra, Portugal. They’ll discuss policy and may focus on the trade-off between slowing growth and containing inflation.
The second major event is the US PCE data on Thursday. The Fed’s preferred inflation measure, the PCE deflator, is predicted to have increased to 6.4 per cent in May from a previous 6.3 per cent in the data. While personal consumption likely decreased, revenues could have somewhat increased.
OPEC+ will meet on Thursday to discuss its next course of action, and traders will look for indications that Saudi Arabia and the UAE is prepared to boost output in the coming months. According to IEA data, they may collectively have an additional 2.2 million barrels per day available to them.