The S&P 500 index futures rose by 0.3% to
5633 points on Monday, nearing the new historical high of 5656 points set on
Friday. Despite a strong sell-off last Thursday, investor sentiment remains positive,
driven by a robust start to the Q2 2024 corporate earnings season, with
JPMorgan (JPM) and Citigroup (C) exceeding profit and revenue expectations.
Wells Fargo reported lower interest income, but overall market optimism
prevailed, leading to a 1.0% weekly gain for stocks.
Over the weekend, an assassination attempt on
Donald Trump during a rally in Pennsylvania led to minor injuries for Trump and
fatalities among attendees. This unprecedented event since the 1981 attempt on
President Ronald Reagan has caused some market volatility. Bitcoin surged by
7.9% to $63,223, while the U.S. Dollar saw fluctuations. Gold and crude prices
remained stable. Trump's rising chances of winning the presidency, given his
support for cryptocurrencies and fiscal stimulus, influenced market reactions,
particularly in Treasury yields and the Dollar.
Trump’s chances for the
U.S. President’s job are rising. Thus, investors are modelling market situation
considering Trump’s figure. He supports cryptocurrencies, which added on the news.
He stands for fiscal stimulus and tariffs. So, Treasuries yields have increased
dragging the Dollar up.
Federal Reserve Chairman Jerome Powell is
scheduled to be interviewed by David Rubenstein at the Washington Economic
Club, where he is expected to deliver hawkish comments that may induce market
volatility.
U.S. retail sales data for June will be
released on Tuesday, with expectations of a -0.2% MoM drop compared to May's
0.1% increase. This could be positive for the stock market if it reduces fears
of aggressive Fed rate hikes.
Goldman Sachs (GS) will report Q2 earnings,
potentially adding positive sentiment. Morgan Stanley (MS) and Bank of America
(BofA) are also set to report on Tuesday with favorable expectations. Netflix's
Q2 report on Thursday will be crucial for the tech sector.
The Eurozone and the United Kingdom will
release June inflation figures on Wednesday, expected to be neutral but
potentially facilitating dovish comments from the European Central Bank (ECB).
The Republican National Convention will
officially nominate Trump for the presidency, with his speech anticipated to
provide significant market insights, especially in light of the recent
assassination attempt.
The SPDR S&P 500
ETF Trust (SPY) reported net inflows resulting in a positive weekly balance of
$899 million, indicating a cautious "wait and see" approach by large
investors.
From a technical
perspective, the S&P 500 index outlook is unchanged. It has surpassed its
primary targets of 5250-5350 points and also hit extreme targets at 5580-5680
points. Immediate resistance is at 5670-5690 points, with support at 5570-5590
points. Some correction
signal may emerge, but there are none so far.
Oil prices are holding
above the support level of $80.00-82.00 per barrel for Brent crude and hit the
resistance at $88.00-90.00 per barrel. Prices are now retreating to $85.00 per
barrel, and a technically favorable period for oil prices has ended, limiting
upside potential. The chances for a drop in Brent prices to $80.00-82.00 per
barrel are rising.
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, while the next is located at $2490-2510 per ounce.
The Dollar lost 0.7% last
week, changing the formation for the EURUSD to the upside with targets at
1.10000-1.11000. The pair has some chances to retest the support at 1.08100-1.08400
this week. If the support survives, the pair will continue up. Otherwise, it
may reverse to the downside towards 1.05000.