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Gold prices higher ahead of FOMC meeting
Gold prices were trading higher on Tuesday, as markets began to prepare for tomorrow’s FOMC meeting.
Wednesday’s Federal Reserve policy meeting will be the first of the year, with some expecting a surprise rate hike from the Fed.
💡 Lower unemployment and higher inflation After a devastating year for jobs (2020), it seemed as though things were looking up as job growth marked an important time in the economic recovery. But that was a short lived celebration. What was supposed to be a transitory period of inflation, will now likely last a while into 2022. Summed to the inflation we can also expect to deal with supply chain issues a bit longer There’s plenty of jobs, just an eroded purchasing power and soul-crushing scarcity |
After December’s meeting, it has been widely expected that a rate hike will come by the end of Q1, however as consumer prices continue to surge, some expect action to come sooner.
This comes just as the IMF cut its global growth forecast for 2022 to 4.4%, from 5.9% in 2021.
As of writing, XAUUSD rose to an intraday high of $1,852, its highest level since November.
Shares in Microsoft were trading lower during today’s session, as traders began to anticipate the company’s earnings call.
Microsoft is set to hold its Q4 earnings call after today’s closing bell and comes after the company’s record acquisition of Activision.
According to analysts, the company is expected to report earnings of $2.31 per share, with revenue for the quarter coming in at $50.88 billion.
This would see earnings higher than they were at the end of 2020, where they came in at $2.03 per share on $43.08 billion in revenue.
$MSFT was trading 0.89% lower as of writing, with the NASDAQ down 1.72%.
Dax 30 rebounds, as German business sentiment climbs
Germany’s DAX 30 was trading higher on Tuesday, as markets reacted to the news that business confidence had risen.
The Ifo business confidence index rose to 95.7, beating expectations for a decline, with a reading of 94.7.
💡 A nice relief after a 6-month decline Ifo said that manufacturing sector managers’ confidence increased significantly, with supply bottlenecks easing slightly. It said service sector managers also were more optimistic and that “the tourism industry is looking forward to a promising summer” — although, for the moment, hospitality “remains stuck in crisis.” |
January saw inflationary pressures somewhat ease in Europe’s largest economy, which many believe to be the reason ECB President Christine Lagarde remains hesitant to hike rates.
Speaking after today’s data release, Ifo President Clemens Fuest said that “The German economy is starting the new year with a glimmer of hope”.
The DAX 30 closed 0.75% higher on the news.
“The big money is not in the buying or the selling, but in the waiting.”
-Charlie Munger.