S&P 500
broad market index futures are rising by 1.3% to 5950 points, recovering almost
a half of last week’s losses. To continue up towards new all-time high the
benchmark has to hold above the resistance at 5930-5950 points.
This week
investors were nervous amid new round of geopolitical escalation. The benchmark
was drifting up in uncertainty over nuclear threat from Russia. They were looking
reluctantly at the macroeconomic data that revealed a pickup of inflation in
the Eurozone, Canada and in the U.K. in October. The situation changed when
Russia attacked Ukraine with a new intermediate-range ballistic missile without
nuclear warheads. This a clear signal to western nations that its payload could
be swiftly changed if needed in case of a further escalation. This message was received
and understood. UN secretary general
António Guterres’s spokesperson said Russia’s use of a new intermediate-range
ballistic missile was “yet another concerning and worrying development”. Investors
considered this statement as a good sign of de-escalation and started buying.
Nvidia (NVDA)
delivered strong Q3 2024 revenue and EPS figures but tempered investor
enthusiasm with weaker forward guidance due to supply chain constraints. The
stock initially surged but ended Thursday up only 0.5% at $146.67.
General sentiment from Q3 2024 corporate reporting is positive pushing
stocks to new records, while macroeconomic data provides little positive
drivers. Investors expect November PMI data in manufacturing and services
sectors. The Eurozone presented shockingly disappointing data pointing to the
contraction in its economy. The EURUSD plunged to 1.03320, the lowest since
December. U.S. PMI could be even more disappointing hammering upside perspectives
for the S&P 500 index. Weak PMIs indicate lower corporate profits, but
raises chances for the interest rates cuts by the Federal Reserve (Fed). This
data is especially important ahead of the Thanksgiving next week. Technically,
the beginning of the week could start on a negative note in case of a disappointing
PMI readings.
Large investors mirror this uncertainty. The SPDR S&P 500 ETF Trust (SPY)
reported net outflows of $5.3 billion for the first three days of the week. It
will be important to see the final figures to understand their reaction on the stock
market recovery perspectives.
From a technical
perspective, the S&P 500’s outlook has slightly improved. The index
surpassed initial targets at 5700-5800 and began a rally toward the 6100-6200
range but failed to break the resistance at 6100-6200. It has retreated below
the 5930-5950 support zone. It the benchmark surpass it could continue up to
6030-6050 points.
In commodities, Brent
crude prices recovered to $74.50 per barrel. The nearest resistance is at
$78.00-80.00, with strong support at $69.00-71.00.
Gold prices have
recovered most of the losses as they jumped to $2,700 per troy ounce. Prices
have retreated sharply, down 6.5% to $2,569 per troy ounce, after the U.S.
elections. This level sits at the bottom of the $2,560-2,580 support range. The
nearest resistance is at $2,750-2,770. In case of a breakthrough, prices could
continue toward $2,870-2,890, with possible highs of $3,200-$3,300.
In the currency
market, the U.S. Dollar has trampled down all rival reserve currencies with the
EURUSD plummeting to 1.03310 immediately after the release of weak PMIs in the Eurozone.
Then the pair reversed to 1.04100. If the pair continues to recover an extreme
reversal formation could emerge.