Thursday's Market Update (Feb 16, 2023)

17 Feb 2023 by rate3

On Thursday's trading session, bears attempted to take revenge inspired by the Bureau of Labor Statistics' report on producer prices, which jumped by 0.7 percent, notably higher than the 0.4 percent forecasted by market analysts. However, their efforts didn't go far. The NASDAQ stayed at its opening levels (open: 11896, close: 11855), and BTC briefly rose above 25K before starting to test the 24K support level in after-hours trading.

With the PPI showing the largest monthly increase since it rose 2.1 percent in June 2022 (led by a 6.2% surge in gasoline costs), the Philadelphia Fed Manufacturing Index plunging to -24.3 in February (compared to a forecast of -7.4), and Initial Jobless Claims as of February 11th at 194K (instead of the predicted 200K), traders have little macroeconomic positivity left to fuel the bull rally.

[Regulators are adding negativity by targeting the largest custodial exchanges, such as Binance and Coinbase, as well as major stablecoins, like BUSD and USDT, with a continuous barrage of nonsenses.]

Despite this, technical indicators suggest that there is still an appetite for high-risk assets among some institutional investors. It is not yet clear whether this sudden demand from large players is purely speculative or driven by a long-term strategic investment strategy.

Meanwhile, the resulting macroeconomic situation is complicated, to say the least. While there are some disinflationary tendencies, surprisingly strong consumer demand, and post-pandemic recoveries in some economic sectors, these may soon be undone by growing recessionary risks and the Fed's hawkish overreaction to continuing service-side price rises, coupled with an inexplicably strong job market. Not to mention the highly volatile geopolitical climate. Overall, this makes the current market positioning a work of art even for experienced traders.