Stocks rise on downshift hopes, Dollar lower for now, Best Buy brings holiday cheer, US data, Gold rebound faded, Crypto benefits from Wall Street rally

​US stocks are rallying as Wall Street continues to expect the Fed to downshift their tightening pace next month and on optimism that the risk of a railroad strike fueling inflation is low. ​ The latest round of Fed speak did not teach us anything new. ​ The Fed’s Mester noted that long-term inflation expectations are reasonably anchored. ​ The labor market is a key concern for the Fed, and Mester also pointed out that labor demand is still outpacing supply. Recent trends however are showing the labor market is showing signs of cooling. ​ ​

Some investors are growing confident that the potential railroad strike might not be as troubling for inflation as the Railway Labor Act will prevent key interruptions. ​ ​

Some traders are looking ahead to the upcoming Minutes, but they are dated (before the cool October inflation report) and will likely show many Fed members have an unclear rate path as inflation is a tricky beast to slay.

FX/Fixed income

Risk appetite is making an appearance today and that is helping send the Treasury yields and the dollar lower. ​ The 10-year Treasury yield fell 4.3 basis points to 3.784%. ​ Cooling inflation drivers, mainly an overpriced weakening of China and the railroad strike impact, are helping drive the dollar down today.

The dollar’s weakness might be limited as options markets are showing too many excessive bearish bets being placed by hedge funds and money managers.

Best Buy

Best Buy shares are rallying after they raised their holiday outlook. ​ This was a welcomed surprise from the retailer that many feared was going to see a weaker consumer refrain from purchasing new TVs, appliances, and other gadgets. It looks like Best Buy is not expecting a disappointing holiday season and that is positive news for other retailers.

US Data

The Richmond Fed’s regional surveys of business activity showed manufacturing activity continued to soften in November. The composite manufacturing index remained negative and shipment and employment deteriorated slightly. ​ The economy is clearly weakening here and inflation should continue to come down as wages and employment decline. ​ Price trends data was mixed as prices paid declined and prices received rose higher, but that was somewhat expected given the return of supply chain issues. China’s reopening will be key for inflation heading lower next year.


Wall Street is mostly green today and that has provided a little boost for cryptos. ​ Bitcoin is back above the $16,000 level but still remains in the danger zone as everyone waits for the next crypto domino to fall. ​ It seems crypto traders are already pricing in a bankruptcy for crypto lender Genesis. ​ Contagion for FTX will impact many but it seems a fresh catalyst is needed for sellers to take control.

Bitcoin could continue to stabilize here if Wall Street rebounds, but that seems unlikely as this bear market for stocks has yet to bottom out. ​ Bitcoin has support ahead of the $15,500 level but if that does not hold, technical selling could send prices toward the $13,500 region. ​ ​

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya