Dow futures +0.08% at 33039
S&P futures +0.45% at 4177
Nasdaq futures +0.90% at 14360
FTSE +0.11% at 7380
Dax +0.40% at 148723
- US core PCE cools in line with forecasts
- Amazon pleases the market after beating forecasts
- Geopolitical tensions rise after US bombs facilities in Syria
- Oil rises but is set to fall across the week
US core PCE cools to 3.7% YoY in September
U.S. futures hold onto gains after inflation data, which did little to change bets on the Federal Reserve pause next week.
The data showed that the US core CPC cooked to 3.7%, in line with forecasts, down from a downwardly revised 3.8% in August. The data also showed that consumers were spending well across the month, with personal consumption up 0.7%, ahead of 0.4% in August and above forecasts of 0.5%. The data points to the US economy holding up well despite aggressive rate hikes from the Federal Reserve, which don't appear to be putting consumers off spending.
The data comes after GDP figures yesterday showed that the US economy grew faster than expected in the third quarter. US Q3 GDP rose 4.9% annualized, a pace of growth last seen in Q4 2021. Data across the quarter also showed that personal consumption jumped by 4% up from 0.8% in Q2.
Looking ahead, attention will start turning to the Federal Reserve's interest rate decision on Wednesday, the 1st of November. The Fed is expected to leave interest rates at 5.25% to 5.5%.
However, in light of the stronger GDP and PMI data this week the Fed is likely to strike a hawkish tone, leaving the door open for further hikes if needed and a possible rate rise before the end of the year.
Meanwhile investors will also keep an eye on . Geopolitical developments after Israel sent troops on a limited raid into Gaza for a second night in a row. News that US also bombed two Syrian facilities it claims are linked to Iran raise concerns of the war spreading.
Earning season continues to be in focus with encouraging numbers from Amazon going some way to repairing the damage from disappointing figures from alphabet and meta earlier in the week.
Amazon is set to open 6% higher after the e-commerce giant posted Q3 results that beat forecasts on both the top and bottom lines. Growth in its cloud business stabilized, and advertising growth jumped, keeping investors happy after a mixed start to big tech earnings.
Intel is rising around 7% ahead of the open after the chip manufacturer posted stronger than forecast guidance for the current quarter and after Q3 earnings beat forecast amid signs that PC demand has bottomed out.
Chevron is set to fall 2% on the open after the oil giant reported a fall in third-quarter profits despite higher oil prices. The results come just days after Chevron agreed to buy US rival Hess for $53 billion.
Ford is set to fall around 3% after the automobile maker pulled guidance owing to uncertainty from the possible deal with the United Auto Workers Union.
Nasdaq 100 forecast – technical analysis.
The Nasdaq found support yesterday at 14055, just above the 200 sma, and is attempting to recover. Buyers will need to rise above 14445, the September low to extend gains towards 14550 the August low and negate the near downtrend. Sellers may be encouraged by the RSI below 50 and will look for a break below the 200 sma, which would be significant given that the index hasn’t traded meaningfully below the 200 sma since February.
FX markets –USD rises, EUR falls
The USD is rising after the core PCE data. The figure comes after yesterday's stronger-than-expected US GDP data and ahead of next week's Federal Reserve interest rate decision. Safe haven flows are also helping support the US dollar as tensions escalate in the Middle East.
EUR/USD remains under pressure after the ECB kept interest rates unchanged at 4% in the previous session amid concerns over the economic outlook for the region. Weak PMI data at the start of the week, combined with a significant slowdown in the ECB's lending survey, point to the eurozone falling into recession in the second half of the year. Q3 GDP data is out next week and is expected to show a contraction.
GBP/USD struggled to gain traction across the week after disappointing PMI data on Monday, which came following weak retail sales last week, painting a gloomy picture for the UK economy. Furthermore, data showing that UK public expectations for inflation in the coming 12 months dropped to 4.2%, down from 4.4% in August. This shows that UK inflation expectations are relatively well-anchored and is unlikely to encourage the Bank of England to hike rates.
EUR/USD -0.21% at 1.0575
GBP/USD -0.07% at 1.2107
Oil rises on Middle East concerns but falls across the week
Oil prices rise at the end of a choppy week of trading as concerns over an escalation in the Middle East once again lift the geopolitical risk premium on oil.
News that the US has hit Iranian-linked targets in Syria sent oil prices $2 per barrel higher as concerns of a broadening Middle Eastern conflict and the potential impact on supply lifted oil prices, a day after oil prices fell $2 on hopes that Middle Eastern tensions were easing.
The volatility in the oil market reflects the instability and fragility of the geopolitical picture in the Middle East.
While oil prices are set to fall over 4% across the week, a ground assault into Gaza by Israel could see oil prices spike higher.
WTI crude trades +1.5% at $84.40
Brent trades +1.5% at $88.40
15:00 US Michigan consumer sentiment
18:00 Baker Hughes rig count