S&P 500 forecast: S&P 500 edges higher after Nvidia results, mixed data

US futures

Dow futures +0.2% at 35150

S&P futures +0.38% at 4554

Nasdaq futures +0.51% at 16013

In Europe

FTSE -0.02% at 7481

Dax +0.5% at 16000

• Stocks consolidate after strong gains this month
• Jobless claims falls, US durable goods orders fall
• Fed minutes reiterate high for longer
• Nvidia beats forecasts but warns on US export controls 

Jobless claims & durable goods orders fall

U.S. stocks are set to open modestly higher after Nvidia’s earnings and a mixed bag of data.

US jobless claims fell by more than expected to 209k from 233k in the previous week. Continuous claims also eased back to 1.84 million, down from 1.86 million and a fall after eight weeks of rising claims.

US durable goods orders fell 5.4% in October, below the -3.1% fall forecast and well down from 4.6% in September.

The data comes after the FOMC minutes released yesterday that showed that the Fed was keen to keep interest rates high for longer. The minutes also suggested that policymakers favored keeping rates steady over a hike, although the opportunity to hike was left on the table should inflation prove to be more persistent and start to rise.

The minutes showed no indication that the Fed was looking to cut interest rates. However, the market it's convinced that the next move by the Fed will be a rate cut, although the timing his perhaps still questionable. According to the CME Fed Watch tool the market believes that the Fed could cut rates Q2 next year.

Today, volumes are likely to be lower ahead of tomorrow's Thanksgiving break as investors consolidate strong gains across November so far. Bets that the Fed is at the end of its hiking cycle has boosted stocks, particularly growth stocks across the month.

Corporate news

Nvidia is set to rise premarket after releasing Q3 earnings that smashed forecasts. The chipmaker, which is the centre of the AI story, posted EPS of $4.02 versus $3.37 forecast, whilst revenue came in at $18.12 billion ahead of the $16.18 billion forecast. However, management warned over the impact of US export controls in the coming quarters.

Microsoft remains in focus after Sam Altman has agreed on a deal in principle with Open AI to return as CEO with a new board. His move comes after being ousted at the end of last week, accepting a job at Microsoft, and after staff revolted. Microsoft is said to be supportive of the move and look forward to continuing working with Open AI.

Guess is on track to open 15% lower after the fashion retailer company posted disappointing Q3 results.

S&P 500 forecast – technical analysis

The S&P500 is testing resistance at 4550, just above the October high. However, the RSI is tipping into overbought territory, so a period of consolidation or a fall lower could be on the cards before any further gains. Buyers will look for a above 4550 to bring 4600 the July high into focus. Failure to rise above 4550 could see the price fall back towards 4500 round number and 4450.

FX markets – USD rises, GBP/USD falls

The USD is rising for a second straight day after the minutes of the latest FOMC meeting reiterated that policymakers were looking to keep rates high for longer in order to ensure that inflation trends back down to 2%.

EUR/USD is falling as investors shrug off warnings by ECB president Christine Lagarde yesterday that the central bank has not done in its fight against inflation. Attention is turning to the ECB economic stability report, which could shed further light on credit conditions in the region and consumer confidence data, which is expected to improve modestly in November.

GBP/USD is falling as investors digest Chancellor Jeremy Hunt's Autumn Statement. This was a tame statement with few major surprises, which isn’t expected to add to inflationary pressures in the UK: A stark comparison to Liz Truss’ disastrous Budget a year earlier. Growth forecasts were downgraded significantly to 0.7% from 1.8% in 2024 as the economy continues to stagnate, putting Jeremy Hunt’s focus on growth. The pound isn’t convinced given its fall towards 1.25.

EUR/USD +0.10% at 1.0920

GBP/USD +0.15% at 1.2475

Oil falls in cautious trade ahead of OPEC+ on Sunday

Oil prices are falling, snapping a three-day winning run as investors turned cautiously ahead of the OPEC+ meeting later in the week.

The oil cartel will meet on Sunday where the group may discuss deepening supply cuts owing to slowing global economic growth. Expectations of supply cuts have lifted oil prices by over 4% so far this week. OPEC+ sources have reportedly hinted that additional supply cuts could be made.

According to the International Energy Agency, even if OPEC+ nations extend cuts into next year, the oil market is still set to experience a slight supply surplus in 2024.

US crude stocks rose by 9.1 million barrels in the week ending November the 17^th, and gasoline inventories fell by 1.79 million barrels.

EIA government inventory data is due later today.

WTI crude trades -2.42% at $75.35

Brent trades -3% at $80.00