S&P 500
broad market index futures are rising by 0.75% to 6015 points this week
slightly retreating from the new all-time high at 6028 points. The record is
just a notch away from the previous peak at 6026 points. There is no single
reason for a new record. Investors are seem to like U.S. President-elect Donald
Trump new Treasury Secretary appointment. Scott Bessenet, a prominent investor,
is a comfortable figure for investment society.
Strong
macroeconomic data contributed to overall positive sentiment. U.S. Q3 GDP
slowed down to 2.8% QoQ from 3.0%, while PCE Index rose in October to 2.3% YoY,
in line with market expectations. Jobless claims were mixed this time. The
American economy is demonstrating sound growth with is slightly rising
inflationary background without any stress in the labour market. Together with positive
corporate reporting stocks are poised to rise.
Although
some technical overbought tensions could be seen in the market new Trump
appointments are offsetting them. The appointment of Bessenet lower inflationary
risks. U.S. 10-year Treasuries yields declined to 4.22% from 4.41% on the news.
Bets on quarter-point interest rates cuts by the Federal Reserve (Fed) in December
increased to 66.5% from 52.7%. This all allows to revalue U.S. stock market
targets to the upside.
Although,
nuances of Trump moves, including new appointments might look prattling after
the his victory in elections that led to a solid rally in the market, but those
nuances will picture the market in the nearest two months. The next stop is on
December 6 when November U.S. labour market report will be released. But before
then Fed Chair Jerome Powell will provide some clues ahead of the last Fed
meeting in 2024. New PMI data will be released in the United States. This may
push the S&P 500 index up towards extreme highs at 6050-6150 points. More
reasons are needed to climb beyond these levels.
Large
investors’ positioning will provide no hints for digesting since the U.S.
continues to celebrate a Thanksgiving Day. So, we have to wait for the next
week to scrutiny their intentions.
From a technical
perspective, the S&P 500’s outlook is unchanged. The index surpassed
initial targets at 5700-5800 and began a rally toward the 6050-6150 range. The
benchmark surpassed the resistance at 5930-5950 points and continues up to
6030-6050 points now.
In commodities, Brent
crude prices declined to $72.18 per barrel. The nearest resistance is at
$78.00-80.00, with support at $69.00-71.00. The Organization of Petroleum
Exporting countries and its allies know as OPEC+ delayed its meeting until
December 5. Last time such delays were seen was at the end of 2023, when the
large cartel capped its oil production sending prices below $80.00 to $72.00
per barrel for a few weeks. Prices were recovering in the following four months
to $92.00 per barrel. This time according to this scenario we may see an initial
decline to $60.00 followed by a recovery to $75.00-80.00 per barrel by March-April
2025.
Gold prices have slightly
retreated to $2,663 per troy ounce this week. 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 EURUSD is recovering by 1.5% to 1.05800 this week. The pair signals
a larger recovery to 1.09500-1.10500 by the end of January – beginning of February.
However, this recovery could happen much faster considering recent oversold
tension in the pair prompted by an extreme reversal pattern.