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  • Weekly Focus: “Magnificent Seven” Reporting, PCE and Nonfarm Payrolls

Weekly Focus: “Magnificent Seven” Reporting, PCE and Nonfarm Payrolls

S&P 500 broad market index futures are rising by 0.7% to 5841 points, or just 0.7% away from its record The S&P 500 index futures rose by 0.7% to 5841 points, nearing its all-time high of 5881 points and within range to break this level soon. Monday’s session is light on data but fueled by positive momentum from last week’s Tesla (TSLA) earnings report, which has investors hopeful for similarly strong results from other “Magnificent Seven” mega-cap stocks this week.

Middle Eastern tensions also eased slightly as Israel’s limited retaliation strike on Iran resulted in minimal casualties, which markets viewed as de-escalating. This sentiment led to a 4.3% drop in Brent crude prices, now at $72.77 per barrel, which may provide further support to U.S. equities.

Earnings reports from Alphabet (GOOG) on Tuesday, Microsoft (MSFT) and Meta Platforms (META) on Wednesday, and Apple (AAPL) and Amazon (AMZN) on Thursday will drive market sentiment. Low expectations for ADP Nonfarm Payrolls, predicted at 101,000 for October, add to a positive sentiment. This data, along with a potentially slower PCE Price Index, will highlight a possible inflation slowdown - a favorable sign for the market.

This hectic week will be closed by the release of the U.S. labour market report for October. Nonfarm Payrolls are expected to drop to 111,000 from 254,000 in September. This report will be the last major economic event ahead of the election day on November 4. So, it should be positive to support Kamala Harris during a close presidential race.

Large investors bet on a positive scenario too. The SPDR S&P 500 ETF Trust (SPY) reported net inflows of $4.82 billion on Thursday after a minor outflow of $60.0 million on Wednesday. So. Large investors made an aggressive upside bet.

From a technical standpoint, the outlook for the S&P 500 index has improved. The benchmark has achieved its initial target of 5700-5800 points and is holding above this level. The index is on track toward the 6100-6200 range. The next resistance lies at 5910-5930 points, with support at 5810-5830 points.

In the commodities market, Brent crude oil prices have closed last week with up by 3.6% to $75.98 per barrel. This week they are retreating by 4.5% to $72.63 per barrel. Prices continue to be volatile amid elevated geopolitical tension in the Middle East. Israel’s retaliation strike on Iran was considered as a move towards de-escalation putting pressure on oil prices. The nearest resistance is at $78.00-80.00, while the support is at $70.00-72.00 per barrel. It is unlikely that prices would breach this range before elections in the U.S.

Gold prices are struggling to surpass the resistance at $2,710-$2,730 per troy ounce. If no significant reversal occurs, gold is likely to continue its rise towards extreme targets of $2,800-2,820, with potential highs of $3,200-$3,300 per ounce.

In the currency market, the EURUSD is forming a reversal to the upside. The pair is recovering to 1.08170, signalling a potential correction of the Greenback. If the pair accelerates to the upside it is likely to return to 1.10000-1.11000 range.