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Below are Views On Daily Global Market Update 11 January 2022 By Asheesh Chanda, Kristal.AI

Buying the dip

Price action was mixed yesterday, at the start of the first full week of the new year. Asia was up with equities higher and vol lower but the trend reversed in Europe (presumably around Omicron worries) and appeared to persist at the start of the US session. Dip buyers emerged around the 4600 level in the SPX though, which closed down only marginally despite being down over 2% intraday. Tech saw a rally too as the Nasdaq reversed a similar decline earlier in the session to close marginally higher. Healthcare was the only notable gainer on the day with almost all other sectors finishing in the red.

Buying the dip wasn't restricted to equities alone - Bitcoin looked shaky as it dipped below the 40k mark briefly. Bids emerged quickly to take it back above the 41.5k support level from the prior session. Gold traded up in its range and Energy was sideways - with no breakthrough coming on the US Russia talks. Both parties there indicated the talks were professional but that any progress would likely take weeks and not days. Natural Gas futures didn't do much in response but held their elevated level from last week.

Powell's released remarks ahead of his testimony tonight seemed to reiterate the central bank's resolve on fighting inflation, saying the path of this recovery is likely to differ from prior ones. The Fed's trading scandal was back in the spotlight though, when it emerged Clarida (Vice Chair and Head of supervision) had gotten back into a sizeable equity position just ahead of a major Fed announcement last year. Clarida decided to bring forward his retirement by a couple of weeks and hand over to Brainard on Jan 14 but Powell will almost certainly face tough questions on the matter tonight. We also have a new round of earnings ahead, kicking off with the big Wall Street banks later this week - expectations are boosted by rising rates here.”

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