To The Moon

$NASDAQ(.IXIC)$rose 222.08 points or 1.97% to closed at 11493.83

The equity market rose back from the dead as the Dow attempted successfully to break the curse of six-day losses. This came as the UK announced the restart of bond purchases to help moderate the violent movement in bonds and currencies.

Such a move by the Bank of England is welcoming and reduces risk and uncertainty engulfing trading sentiments. The movement had a real impact, as the 10-year Gilt yield fell to around 4% after touching a high of 4.6% during the week.

The decline also helped to put a brake on the US yield as it trends lower. We saw the 10-year Treasury yield falling significantly to 3.7% from the high of 3.96% on Tuesday. For some, the stock market is already in oversold territory, as a sell-off was seen even in defensive counters.

The Dollar strength is worrying

The strong greenback narrative has come alive, which has a detrimental effect on the stock market. While Wednesday saw a falling US yield that dragged the dollar lower, there are still lingering concerns about its impact on MNCs in the upcoming earnings season.

US stock community daily commentary will be hunting for insights into the development of the currency market.

What's on the menu today?

Today is an important day for the stock market with major economic data releases.

At 8.30 pm, we will receive the GDP data for QoQ, which we expect to drop 0.6%, similar to the level in the prior period. Investors will be looking for a clue to fulfil their confirmation bias that the economy is diving into bad shape.

The Initial Jobless Claims will also be released, and we should see a reasonably constant level at 215K.

FOMC Member Bullard will speak again at 9.30 pm today. He has supported aggressive rate hikes, and hopefully, the market is fully sensitized to his hawkish comment.

FOMC Member Mester will speak at 1 am. In the recent trend, she has pivoted to become more supportive of Fed’s aggressive stance to rein in inflation.

We have taken some shorts loss off our book and will look to trade lightly as we move towards a season of important data and speeches by the Fed for direction.