Federal Reserve could trigger stock market crash | 20 October 2023

Federal Reserve could trigger stock market crash


#SP500:


Jerome Powell insists that it is too early to talk about victory over inflation, and the Federal Reserve chairman does not rule out another rate hike to address inflationary risks to the economy. This situation is having a negative impact on the equity market, as the dividend yield on the S&P 500 is two-thirds below the Fed's target rate, and another hike would only exacerbate the situation. Traders were also monitoring news out of the Middle East. Israel said it carried out raids inside the Gaza Strip, its first announcement of ground operations aimed at Hamas fighters after their deadly rampage in Israel. The United Nations said Israel's call for Gaza civilians to leave was impossible "without devastating humanitarian consequences."


Trading recommendation: sell 4340 and take profit 4250.


Federal Reserve could trigger stock market crash


XAUUSD:


One reason why gold prices are rising is because of geopolitical tensions in the Middle East. Many tears are not saying that investing in gold is attractive because all the textbooks say that geopolitics always helps push gold prices up. And secondly, central banks have started buying gold again. If Turkey burned through its gold reserves in the second quarter to maintain a stable lira currency ahead of elections, the central bank stopped spending its reserves once the elections were over. The People's Bank of China has been buying gold every month for the past year.


Trading recommendation: buy 1880 and take profit 1910.


Federal Reserve could trigger stock market crash


#WTI:


Oil prices leapt nearly, with Brent posting its highest weekly gain since February, as investors priced in the possibility that the conflict in the Middle East could widen as Israel began ground raids inside the Gaza Strip. Israel's announcement marked a shift from an air war to ground operations to root out Hamas fighters a week after the militant Palestinian group's deadly rampage in southern Israel. The conflict in the Middle East has had little impact on global oil and gas supplies, and Israel is not a big producer. Investors and market observers, however, are assessing how it could escalate and what it might mean for supplies from nearby countries in the world's top oil producing region.


Trading recommendation: buy 85.01 and take profit 87.77.

 

David Johnson
Analyst of «FreshForex» company
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