S&P 500 broad market index futures are
rising by 0.5% this week, reaching 5500 points. Following a slight retreat on
Monday, the benchmark climbed to new highs for the rest of the week, though it
has yet to surpass the all-time high of 5516 points. This peak could be renewed
soon.
Large investors continued to accumulate
positions, with the SPDR S&P 500 ETF Trust (SPY) reporting net inflows of
an impressive $16.0 billion compared to overall net outflows of $13.4 billion,
demonstrating significant volatility. The U.S. Q1 final GDP was revised to 1.4%
QoQ from 1.3%, a minor improvement. In the political arena, Democrat Joe Biden
lost a debate to Republican Donald Trump, with CNN reporting Trump winning 67%
of the vote compared to Biden's 33%. This has led to speculation about new
Democratic nominees, including a potential Michelle Obama and Hillary Clinton
tandem, though the election is fast approaching in November.
The market has reacted positively to Trump’s
performance, with U.S. 10-year Treasury yields pulling back to 4.30% from
4.35%. S&P 500 futures rose by 0.3% on Thursday and continued another 0.4%
up on Friday. The Dollar also strengthened, as investors view the Republican
candidate as more market-friendly.
Today, the Federal Reserve's (Fed) preferred
inflation gauge, the PCE Index, will be released. Wall Street expects it to
slow down, which could further boost stocks. Over the weekend, early
Parliamentary elections in France will be held, with the far-right National
Rally party led by Marine Le Pen having strong chances to win. Investors might
exercise caution before the election results are announced, but pre-election
polls could prompt large investors to make new purchases.
Next Monday is expected to start with elevated
volatility. Investors need to rebalance their portfolios as the week will be
filled with significant events, including the release of FOMC Minutes and June
Nonfarm Payrolls. The S&P 500 index has a strong chance to reach new
all-time highs.
From a technical perspective, the S&P 500
index outlook remains largely unchanged. It has surpassed its primary targets
of 5250-5350 points and is now aiming for extreme targets of 5650-5750 points,
potentially achievable in the first week of July. Immediate resistance is at
5570-5590 points, with support at 5470-5490 points.
Oil prices are holding above the support level
of $80.00-82.00 per barrel for Brent crude, steadily climbing toward resistance
at $88.00-90.00 per barrel. This climb is supported by OPEC+, which indicated
that any increase in oil production in October would be symbolic compared to
current levels. Political tensions in the Middle East also support prices.
However, a technical period favorable for oil prices will turn negative next
week, potentially limiting upside potential.
Gold prices, having reached mid-term targets
of $2000-2100 per troy ounce, are now eyeing extreme targets of $2400-2500.
There is limited room for further increases, and a pullback could occur soon.
For a downside scenario targeting $2200 per ounce to materialize, support at
$2300-2320 must be breached. Immediate resistance is at $2390-2410.
The currency market is consolidating, with
EURUSD resting at 1.06600-1.06800 ahead of major events. The nearest support,
now at 1.06000, will move to 1.05000 next week.