Wednesday’s session on Wall Street represents an informal finish of this trading week. The fact is that on Thursday, November 25, the U.S. stock exchanges will be completely closed because of Thanksgiving celebrations in honour of the famous treat when three centuries ago, the Wampanoag tribe people and the early colonists shared an autumn harvest feast.
Over the course of the next day, the very possibility of trading will be available to those who wish to do so in the half-working day mode. Yet, professional investors are perfectly well aware that some traders may decide to take any actions on such a quasi-vacation Friday only in the case of extremely valuable positive corporate news, especially in case of negative financial market news which may require their urgent intervention.
All other moves will wait until the beginning of next week. At least, for this reason, the closing of trading this Wednesday will become an important indicator of general sentiment, including the global market scale. While the Nasdaq index of the tech sector continues to flirt with the 16,000 point mark, the S&P 500 broad market index managed to reach a new all-time peak, which was very close to the 4,750 next target on Monday then returned to the 4,650-4,680 area. The partial but natural process of closing excessive market portfolios on issuers, which just happened to set new records these days, combined with a cautious decrease in positioning on a spectrum of moderate assets, took place before the longest weekend of the year.
Also, keep in mind the impact of European lockdowns, a situation where the current pullback leaves the S&P 500 quotes at least above 4,600 tonight, perhaps, would be sufficient. Comfortable signal of market confidence for the future to continue the pre-Christmas rally in December, as the index futures did not even try to drop even below 4,630 during the previous attempt to correct the movement on November 9-10 slightly. Suppose the S&P 500 index reaches above the levels between 4,600 and 4,630 points, or even close to them. In that case, it could be quite an effective technical criterion for keeping the overall upside sentiment intact for the future. If S&P 500 futures manage to gain a foothold above the 4,700 mark at the close of the U.S. trading session on Wednesday, it would mean that the majority of the market crowd is rather afraid to stay out of stocks and then find themselves lagging behind the inflation engine. In the case of the leading stocks may jump up after the weekend, which could indicate a stronger bullish sentiment than previously assumed.
The particular moment when the market directly reacts to the release of the Federal Reserve Minutes, which are unlikely to carry fundamental and meaningful surprises about the slow process of money tapering, will probably become only a small part of the flow of the total psychological and partly irrational attitude of the investment community to the whole market picture. This may be very similar to the impact of the one-time news about the nomination of Jerome Powell once again for the post of Chairman of the Federal Reserve by a democratic party president Joe Biden on Monday. The reaction then was mixed, first rather positive and even leading to new highs, then moderately negative. It most likely indicated the market’s tendency to adjust its decisions, and therefore each of its next moves, to prices of certain leading assets, rather than to the mental pressure of the news itself. There is no escaping the impression that the clarifying backup information from the Federal Reserve sources may create more volatility on U.S. bond yield prices and maybe on currency markets than on the value of stock portfolios.
Queen Denise Keza, an analyst at Esperio broker