Nasdaq100 Forecast: Stocks slip after jobless claims, ahead of Powell

US futures

Dow futures -0.3% at 33530

S&P futures -0.2% at 4270

Nasdaq futures -0.30% at 14539

In Europe

FTSE -0.1% at 7570

Dax -0.1% at 15242

• Jobless claims are lower than expected
• US government shutdown worries remain
• USD eases from a 10-month high
• Oil eases from a yearly high

Jobless claims remain low

US indices are pointing to a modestly lower start as investors digest the latest rounds of economic data and look ahead to comments by Federal Reserve chair Jerome Powell.

US jobless claims came in stronger than forecast at 204k, this was very slightly from 202k in the previous week but below the 215k that was forecast. The data shows that the US jobs market remains resilient despite the Fed's aggressive high-rate hiking cycle.

Meanwhile, US GDP for the second quarter was confirmed 2.1% in the final reading, up from 2% in the first quarter. Core PCE prices across the quarter had cooled to 3.7%, down from 4.9% in the first quarter, confirming cooling inflation.

However, with oil prices at a yearly high and amid the resilience of the US economy, concerns over inflation linger, and the prospect that the Federal Reserve will need to keep interest rates higher for longer keeps stocks under pressure.

Looking ahead, US pending home sales and several Fed speakers, including Federal Reserve Powell, will be in focus and could shed more light on the future path for interest. Last week, the Fed hinted towards another interest rate hike this year and less easing across the coming year as the fight against inflation continued.

Meanwhile, a partial shutdown of the US government is just three days away, which could be dragging on sentiment. Congress must pass legislation by midnight on Saturday to avoid a Federal government shutdown and the furlough of hundreds of thousands of Federal workers. While the market’s broad assumption is that this won’t happen, signs of nerves could start creeping in.

Corporate news

Micron falls pre-market despite beating fiscal Q4 earnings and revenue forecasts. The chip maker disappointed with fiscal Q1 forecasts of a loss per share of $1.07, wider than the $0.95 expected. However, the current quarter revenue projection also topped estimates at $4.40 billion.

Gamestop is rallying on the news that billionaire activist investor Ryan Cohen has been named as the CEO, effective immediately.

Peloton shares have popped pre-market on the announcement of a 5-year strategic partnership with Lululemon, where Peloton’s content will be available on Lululemon’s exercise app, and Lululemon will be Peloton’s primary sportswear partner.

Nasdaq 100 forecast – technical analysis.

After breaking below the multi-month rising trendline and the 100 sma, the price failed to close below the 14540 support. This level acts as an immediate support, with a break below here opening the door to yesterday’s low of 14430. A break below here creates a lower low. Meanwhile, should 14540 hold, then buyers will look for a rise above 14790, last week’s high to expose the 100 sma  at 14915.

FX markets –USD falls, GBP rises

The USD is falling away from a 10-month high reached on Wednesday, although it is still on track for an 11^th straight week of gains. Treasury yields reached a 16-year high this week amid the prospect of higher rates for longer, boosting the greenback.

EUR/USD is rising, capitalising on a weaker U.S. dollar, and despite German inflation cooling by more than expected and eurozone consumer confidence deteriorating further. Eurozone consumer sentiment fell to -17.8 from -16 in September—meanwhile, German inflation cooled by more than expected, to 4.5%, down from 6.1%. The data supports views that the ECB could be at the end of its hiking cycle, although interest rates are expected to remain elevated for a longer period of time.

GBP/USD is Rising, capitalising on the weaker USD and previously oversold conditions. The outlook for sterling still remains weak as the market is convinced that the BoE has concluded its rate hiking cycle and amid a gloomy outlook for the UK economy.

EUR/USD +0.3% at 1.0535

GBP/USD +0.60% at 1.2300

Oil holds steady on tight supply & inflation worries

Oil prices are holding steady after rallying 3.6% yesterday, in the strongest daily performance since the start of June. Oil prices are on track to book a fourth straight month of gains, with the price hitting a yearly high.

The latest leg high came after a drop in US crude stockpiles, adding to mounting worries over tight global supplies. US crude stockpiles fell by 2.2 million barrels, well below the 320k barrel draw forecast.

Crude stockpiles at the Cushing, Oklahoma storage hub fell by 943k barrels to less than 22 million barrels, the lowest level since July 2022, close to the minimum operating level.

Supply remains tight amid production cuts of 1.3 million barrels a day by Saudi Arabia and Russia, which have been extended to 2024. OPEC+ will meet next week to discuss output.

Meanwhile, concerns over higher interest rates for longer in the US, the world’s largest consumer of oil, are weighing on the demand outlook, keeping gains in check.

Looking ahead, Fed speakers could give further clues about the outlook for the future path of interest rates.

WTI crude trades -0.5% at $92.44

Brent trades -0.4% at $93.88

Looking ahead

15:00 Pending home sales

21:00 Federal Reserve Chair Powell speaks