S&P 500 Forecast: SPX steady with Middle East tensions & Netflix in focus

US futures

Dow futures -0.01% at 37760

S&P futures 0.03% at 5011

Nasdaq futures -0.09% at 17380

In Europe

FTSE -0.5% at 7842

Dax -0.7% at 17733

• Futures pare earlier losses as Iran downplays Israel's attack
• Netflix falls despite beating Q1 forecasts
• Bitcoin halving will happen later today
• Oil gives back earlier gains and is set to fall across the week.

Stocks inch higher after recent losses.

US futures are holding steady, recovering from losses as Middle Eastern fares fade. Futures had fallen sharply after Israel launched a counterattack on Iran on Friday, the latest tip for tat exchange between the two Middle Eastern enemies.

Iran has downplayed the attack, which reportedly caused no casualties and minor damage. This downplaying and officials' comments that Iran is not planning to retaliate have helped ease fares and improve market sentiment.

The geopolitical tensions come at a time when the financial markets are jittery anyway as they readjust expectations over how much the Fed could cut rates this year.

Yesterday, the S&P 500 and the NASDAQ 100 closed lower for a fifth straight day after the jobless claim was stronger than expected, and Fed officials suggested that the U.S. central bank was in no rush to cut rates. Atlanta Fed president Raphael Bostic even said the Fed may need to hike rates if inflation remains persistently sticky.

Today, there is no high impacting U.S. economic data; attention will be on U.S. stock after more corporate earnings and ahead of a Bitcoin halving.

Corporate news

Netflix is set to fall 5% on the open after beating earnings and revenue expectations but issuing weaker-than-expected revenue forecasts for the current quarter.

Netflix reported earning EPS of $5.28 on revenue of $9.37 billion, topping estimates of $4.51 on revenue of $9.27 billion, thanks to stronger-than-expected subscriber growth. Netflix added 9.33 million users, well ahead of expectations for the 4.8 million net additions.

For the second quarter, the company forecasted an EPS of $4.68 on revenue of $9.49 billion, below expectations of $4.55 on revenue of $9.5 billion, and cautioned that paid net additions would slow in Q2.

American Express posted stronger-than-expected results, with EPS of $3.33 ahead of the $2.95 forecast and revenue of $15.8 billion above the expected $15.79 billion. While transaction value rose by 6%, bad loan provisions also increased.

Coinbase and other crypto stocks are in focus as Bitcoin prepares for its halving event later tonight. Bitcoin initially fell below the 60,000 level before rebounding to almost 65,000. Trading volume in Bitcoin is up nearly 2% over the past 24 hours ahead of the halving, which will see miners’ rewards cut to 3.125 tokens from 6.25.

S&P 500 forecast – technical analysis.

The S&P 500 has been trending lower, dropping sharply to support the 100 SMA at 4940 before rebounding back up to 5000. The long lower wick on today’s candle suggests that there was little selling demand at the lower levels. This hammer candlestick pattern is often found at the bottom of a downtrend. Buyers will look to lift the price above 5000 and on to 5050, the March low. Above here, 5150 comes back into play.

FX markets – USD slips, EUR/USD rises

The USD is edging lower and is on track to neither rise nor fall across the week despite hawkish comments from Federal Reserve policymakers, who have said there is no rush to start cutting rates.

EUR/USD is inching higher above 1.0650 after German producer prices fell less than expected in March, dropping 2.9%, less than the 3.2 decline forecast and driven by lower energy prices. The data comes as the ECB signals that they could cut interest rates in June ahead of the Federal Reserve, which could limit gains in the euro-U.S. dollar.

GBP/USD is holding steady around 1.2450, close to the 2024 low after UK retail sales were weaker than expected. Retail sales showed zero growth despite consumer confidence rising to a two-year high. Economists had expected a 0.3% increase in sales in March. The data comes after wage data earlier this week showed growth. Wage growth was still strong, and inflation declined less than expected in March to 3.2%. Bank of England governor Andrew Bailey hinted that the Bank of England could cut rates before profit.

Oil gives back early gains & is set for a weekly loss

Oil prices are falling and on track to fall 4% across the week despite Israel's reported attack on Iran.

Oil prices initially spiked 4% on reports that Israel had attacked Iran overnight on fears of a major escalation of tensions in the Middle East.

However those fears have eased as the session has progressed as Tehran played down the incident and suggested it had no plans to retaliate further.

Instead, concerns over the demand outlook are once again in the driving seat, pushing oil prices lower. The prospect of high interest rates for longer in the US, the world's largest oil consumer, could mean slowing economic growth, which is unfavorable for the oil demand outlook.

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