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Major market averages move higher on Wednesday’s session as investors await the release of the Federal Reserve’s Beige Book which is due out later this afternoon.
Early on and the Nasdaq Composite (COMP.IND) is +0.5%, the S&P 500 (SP500) is +0.3%, and the Dow (DJI) is higher by 0.3%.
Rates have reflected some downside pressure. The 10-year Treasury yield (US10Y) is lower by 4 basis points to 3.29% and the 2-year yield (US2Y) is down 2 basis points to 3.47%.
The dollar continues to build strength as the dollar index touched 110.78 earlier, its highest level since June of 2002. Oil prices decline as well and Bitcoin hovers near year-to-date trading lows.
The Bank of Canada raised its policy rate Wednesday by 75 basis points to 3.25%, as expected, from its previous rate of 2.5%.
On an economic front, financial participants await the release of the Federal Reserve’s Beige Book of economic conditions at 2:00 pm ET. The Beige Book provides an overall summary of economic conditions based on data from the 12 district banks.
UBS chief economist Paul Donovan: “The US Federal Reserve’s Beige Book is a survey, but the responses might have more authority and there is no attempt to simplify the complexity of the US economy into a single data point. Recent data has shown US job creation to be strong or almost non-existent, service sentiment is positive or negative—so there is much uncertainty. The main issue remains—will consumers use savings and borrowing in support of spending?”
On a broader stance, BTIG put out an investor note that stated: “There is no question the market is oversold. Internally, just 5% of SPX components are above their 20 DMA, the lowest since June. Externally, the SPX itself is more than 5% below its 20 DMA and daily stochastics are as oversold as they have been since the June lows.”
“Add to this the fact that 3,900 should be meaningful support, and the market has every reason to bounce. Recently, however, it cannot hold rallies.”
Among active stocks, shares of the Chinese EV maker NIO have fallen after the company posted a mixed Q2 earnings report.
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Image and article originally from seekingalpha.com. Read the original article here.