S&P500 Outlook: Stocks broadly flat ahead of a key week
Stocks on Wall Street are pointing to a broadly flat open ahead of several key events this week. US CPI inflation data will be the key focus and could set the tone for trading until the FOMC meeting later this month. US earnings season also kicks off this week with US banks on Friday. Investors are bracing themselves for a third quarter of year over year falling profits. Today, Fed speakers are in focus following Friday's mixed NFP report.
Share this:
US futures
Dow futures +0.1% at 33770
S&P futures +0.2% at 4400
Nasdaq futures +0.02% at 15045
In Europe
FTSE +0.54% at 7290
Dax +0.6% at 15695
- US CPI & Q2 banks earnings this week
- Fed speakers in focus after Friday’s NFP report
- USD rises paring Friday’s losses
- Oil slips after weak China data
US CPI & Q2 banks earnings this week
US stocks are set to kick the week off broadly higher in quiet trade, with US inflation data and earnings season in focus.
The release of U.S. CPI data is the main focus and will likely set the tone for trading for the coming weeks.
However, earnings from major US banks, including JP Morgan, Citigroup, and BlackRock, will also be watched closely as they kick off the Q2 earnings season.
Analysts expect a-6.8% year profit decline and a 0.4% decline in revenue growth. For the third straight quarter with year-over-year decrease in earnings and the first drop in sales since Q2 2020. Worst reporting season in three years due to the negative impact of several macroeconomic headwinds, including high inflation, rising interest rates, and a larger squeeze on consumers.
Today there is no economic data that is due to be released. Investors are still weighing up Friday's nonfarm payroll report 209K shops were added in June, below the 225K forecast and well down from 339k in May. However, average earnings rose by a larger-than-expected 4.4%.
Attention now turns to Federal Reserve speakers, including Loretta Mester, Raphael Bostic, and Mary Daly. Investors will be keen to hear any reflections on the US jobs report, expectations for inflation, and the future path for interest rates.
Corporate news
Nvidia is rising 1% premarket after Goldman Sachs upwardly revised its price target to $495 from $440 and reiterated its buy rating for the stock. Analysts cited the potential boost from artificial intelligence as the reason for the hike.
Meta rises over 1% premarket after its Threads platform service hits 100 million users in under a week since its launch.
S&P500 outlook – technical analysis
The S&P500 continues to trade within its multi-month rising channel. The price eased back from resistance at 4456, finding support on the 20 sma on Friday. While the price slipped briefly below the 20 ma support in early trade today, it has once again risen back to it at 4400. Whether the 20 sma holds will dictate whether the S&P500 can rise towards 4456 and fresh 2023 highs. Failure to rise above the 20 sma could see sellers look towards 4376, the daily low ahead of 4320, last week’s low.
FX markets – USD rises, GBP falls
The USD is rising following the mixed U S jobs data for June. Meat is cautious ahead of US inflation data later in the week, and attention remains on the Federal Reserve, with several speakers due later today.
EURUSD is falling amid U.S. dollar strength and after weaker-than-expected investor sentiment. The Sentix investor confidence dropped a - 22.5 in July, down from - 17 in June, marking its third straight monthly decline and an 8-month low. Data suggests that the eurozone economy remains in recession mode with few signs of optimism.
GBPUSD is falling away from 1.2850, the YTD high reached on Friday, amid a cautious market mood. Pound bulls appear hesitant ahead of tomorrow's UK labour market data and ahead of a speech from BoE Governor Andrew Bailey.
EUR/USD -0.15% at 1.0965
GBP/USD -0.49% at 1.2775
Oil slips after weak China data
Oil prices are edging lower at the start of the week after strong gains last week as investors digest weaker-than-expected inflation data from China.
Chinese inflation stagnated at 0% YoY in June, an almost 2-year low, and factory gate inflation dropped 5.4%, falling at the fastest pace in more than seven years. To get the data to evidence that the recovery in the world’s largest oil importer has slowed.
However, losses are being limited after OPEC+ announced plans to reduce supply further. Oil rallied 4% last week, rising to the highest level since May after Saudi Arabia and Russia pledged to deepen supply cuts in August.
WTI crude trades -0.7% at $73.20
Brent trades at -0.7% at $77.87
Looking ahead
N/A
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Dow Jones Slide Shows What Rate Hike Bets Mean for Stocks
The Dow Jones support breakdown shows rising bond yields and rate hike bets hitting U.S. stocks while tech giants prop up the Nasdaq.
Dow Jones Forecast: DJIA rises after weaker jobs data
U.S. stocks are rising after weaker-than-expected U.S. jobs data saw markets rein in rate hike expectations.
Nasdaq 100 Forecast: NDX slips as Treasury yields keep rising
U.S. stocks are falling at the start of Q4, as gains in software stocks offset concerns over soaring Treasury yields. U.S. Treasury yields continue to rise, with the 10-year yield up 2 basis points at 5.31% and the 30-year at 5.66%, multi-decade highs.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.