S&P 500 Forecast: SPX subdued at the end of a strong Q1

US futures

Dow futures 0.05% at 39806

S&P futures 0.03% at 5253

Nasdaq futures  0.03% at 18285

In Europe

FTSE 0.39% at 7957

Dax +0.03% at 18492

• Stocks subdued after hawkish Fed comments
• US Q4 GDP is revised higher to 3.4%
• US core PCE data & Fe Chair will speak tomorrow
• Oil rises on supply worries

Waller pushes back on rate cuts, GDP revised higher

US stocks point to a subdued open as investors weigh an upward revision to US GDP and hawkish comments from Federal Reserve governor Christopher Waller in the final trading day of the quarter.

Waller described recent inflation figures as “disappointing” and said he would like to see a couple of months of better inflation data before cutting interest rates. He also praised the strong economy and hiring and said the Fed is in no rush to cut interest rates.

Fed Governor Waller joins voting member Raphael Bostic, preferring a more patient approach. Bostic had said earlier this week that he only expects one rate cut this year.

US GDP was upwardly revised to 3.4% in Q4, which was annualized up from 3.2%. While GDP was down from 4.9% in Q3, the data indicates an economy still expanding at a healthy pace. Consumer spending was also holding up well.

Meanwhile, jobless claims defied expectations and remained unchanged at 210K, better than the 215K that economists had forecasted.

Attention now turns to tomorrow's core PCE inflation data and a speech by Federal Reserve chair Jerome Powell. Both events could be market-moving. However, U.S. stock markets are closed for the Good Friday holiday, so we could see how volatile it is on Monday.

Q1 has been a strong quarter, which has seen the market charge 10% higher, marking its fifth straight month of gains.

Corporate news

Walgreens Boots is set to fall 0.8% lower after the pharmacy chain posted Q2 sales that beat expectations. However, it lowered its full-year adjusted earnings outlet due to a challenging retail environment and after taking a $5.8 billion impairment charge on its village MD business.

Este Lauder is rising 3.7% premarket after the cosmetic firm changed its strategy and will now sell the Clinique brand via the US Amazon premium beauty store.

S&P500 forecast – technical analysis.

The S&P 500 is hovering around its all time high. So far the bulls have ignored the bearish divergence on the RSI. Bulls will look to rise above 5356 to fresh all time highs. Support can be seen at 5200 the weekly low. Below here 5100 the mid-March low comes into focus.

FX markets – USD rises, EUR/USD falls

The U.S. dollar is rising for a third straight day, lifted by hawkish commentary from Federal Reserve governor Christopher Waller and as investors look ahead to Federal Reserve Jerome Powell's speech tomorrow and US core PCE data.

EUR/USD is falling towards its weekly low after German retail sales slumped 1.9% MoM in February, highlighting the weak consumer outlook in the eurozone's largest economy. With consumers remaining cautious, a Q1 rebound is looking increasingly unlikely. The data comes after German consumer confidence data earlier in the week ticked higher, but the willingness to spend sub-index fell, showing uncertainty for the consumption outlook.

GBP/USD is falling against the stronger U.S. dollar after data confirmed that the UK economy tipped into recession at the end of last year. However, losses are being limited following hawkish commentary from Bank of England policymaker Jonathan Haskell. Haskell said he believed interest rates should remain unchanged for an extended period. Haskell voted to keep interest rates on hold in the previous meeting after voting for rate hikes.

Oil jumps on supply concerns.

Oil prices rise after two days of losses and are on track to gain around 2.5% this week amid ongoing concerns over tight supply.

Oil prices had been lower in the previous sessions after a rise in US crude oil, gasoline, and inventories. However, the increase was smaller than expected after the huge draw on stockpiles reported by the API.

Attention will now turn to the OPEC+ meeting next week, which is a technical meeting and is unlikely to result in any output policy changes.

The market is also expecting both the Federal Reserve and the ECB to cut interest rates in June, and a lower interest rate environment is supportive For the demand outlet.