The S&P 500 broad market index futures
have experienced a slight decline of 0.3%, falling to 5218 points, extending
the decrease observed on Friday when prices retreated by 0.3%. Despite reaching
a new all-time high last week at 5268 points with a 2.1% upside during the
week, high overbought tension and technical correction may lead to downside
openings this week. Such declines are considered normal after reaching new
records, although more significant negative drivers would be necessary for
further downside movement.
The U.S. 10-year Treasuries yields have
declined to 4.19% from 4.34%, while bets on an interest rate cut by the Federal
Reserve (Fed) in June have increased to 67.3%. Investors have also bolstered
their holdings in the SPDR S&P 500 ETF Trust (SPY) by $24.7 billion last
week, marking the largest capital inflow since December 2023. The dovish tone
of the Fed meeting last week was cited as the reason for this record capital
inflow, echoing the scenario observed in December.
With no major events expected this week,
attention turns to the U.S. Q4 2023 GDP, which is anticipated to be confirmed
at 3.2% quarter-on-quarter. Additionally, the February PCE indexes in the U.S.
are expected to be relatively neutral, with consensus suggesting a 2.8%
year-on-year increase and a potential acceleration to 0.4% month-on-month from
0.3% for the headline index. The core PCE index, which excludes volatile food
and energy prices, is anticipated to remain unchanged at 2.8% year-on-year and
decrease to 0.3% month-on-month. This may contribute to the upside for stocks.
Technically, the S&P 500 index has
surpassed the final upside target zone at 4850-4950 points and entered a period
of potential correction opportunities. Therefore, monitoring any reversal
patterns that may emerge on the chart is advisable. The existing reversal
pattern suggests a standard correction of 5-7% within the next week, with
potential downside opportunities possibly emerging by the end of March. The
nearest resistance is at 5300 points, while support is at 5200-5220 points.
In the oil market, prices failed to breach the
resistance at $87.00-92.00 per barrel of Brent crude and retreated to $85.00.
From a technical standpoint, downward pressure prevails in the market, expected
to continue throughout mid-May. The nearest resistance is at $87.00-92.00 per
barrel, while support is at $81.00-83.00 per barrel.
Gold prices, having reached mid-term upside
targets at $2000-2100 per troy ounce, established a new all-time high at $2222
following the Fed's clear dovish signals to the market. The nearest resistance
is at $2210 per ounce, while support is at $2110-2130. A technical period
favorable for downside scenarios has commenced, expected to last until
mid-April.
The Greenback's strengthening has slowed down,
with the Chinese Yuan recovering by 0.5% on Monday. This movement in China's
national currency may prompt a correction of the Dollar by 0.5-0.7%,
potentially leading to a rise to 1.08700-1.08900 for the EURUSD pair. Betting
on both the rising and declining EURUSD remains risky, with a return to the
1.11500-1.12500 area likely, but a drop to 1.05000 should not be excluded.