21.11.202214:42 Forex Analysis & Reviews: Fed officials' statements cannot help stock market

Over the weekend, Federal Reserve officials made statements that might imply a slowdown in aggressive rate hikes. However, these statements could hardly support the US stock market yet. Investors are likely to scrutinize the November meeting minutes to confirm Fed's policy reversal. The minutes will be released later this week.

President and CEO of the Federal Reserve Bank of Boston Susan Collins recently expressed confidence that policymakers could curb inflation without doing too much damage to employment. "By raising rates, we are aiming to slow the economy and bring labor demand into better balance with supply," Collins said in prepared remarks for a Boston Fed conference on the labor market. "The intent is not a significant downturn. But restoring price stability remains the current imperative and it is clear that there is more work to do."

Meanwhile, as a result of a recent series of rate hikes, the central bank's overnight borrowing rate was increased to 3.75-4%. In addition, virtually all Fed officials have said they expect more increases to come.

Collins also noted that it was important to bring inflation down and acknowledged that the Fed's moves could be costly. "I remain optimistic that there is a pathway to re-establishing labor market balance with only a modest rise in the unemployment rate – while remaining realistic about the risks of a larger downturn," Collins said.

Premarket

Carvana fell by 3.2% after an internal announcement that the company planned to lay off about 1,500 employees or 8% of its workforce. Carvana lost another 4.6% during premarket trading today.

Rent the Runway fell by 12% after Morgan Stanley downgraded the online clothing reseller's stock to "neutral" from "buy." Rent the Runway said the situation with their business was more volatile now than it was expected, indicating difficulties to receive profits.

Farfetch declined by 17% after the company failed to meet economists' top-line and bottom-line growth expectations for Q3 this year.

Shares of cryptocurrency exchange Coinbase dropped by more than 8.0% but then managed to recover slightly after Bank of America downgraded the company to "neutral" from "buy," saying that the FTX collapse increases the risk of contagion for other platforms and companies in the industry. The stock is currently down by more than 6.0% during premarket trading.

As for the S&P 500 index, after Friday's surge, the pressure on the index has returned. Currently, bulls need to protect the support level of $3,942. As long as the index is trading above this level, the demand for risky assets may remain. This is likely to strengthen the trading instrument and return the levels of $3,968 and $4,003 under control. If the level of $4,038 is broken through, the price may continue the upward correction and reach the resistance level of $4,064. The next target is located in the area of $4,091. If the S&P 500 index declines, bulls should prevent the price from falling below $3,942. If this level is pierced from above, the trading instrument may be pushed down to $3,905, opening the way to a new support level of $3,861.