S&P500 Forecast : SPX rises ahead of key data and earnings this week

US futures

Dow futures 0.41% at 37960

S&P futures +0.30% at 4855

Nasdaq futures 0.50% at 17393

In Europe

FTSE +0.17% at 7476

Dax +0.16% at 16625

• US Stocks at record levels
• US GDP & core PCE due this week
• Earnings season ramps up this week with NFLX, TSLA
• Oil holds steady at the start of the week 

Stocks extend last week’s gains

US stocks are pointing to a higher open, extending games from last week when the S&P 500 and the Nasdaq100 hit record highs.

After a shaky start, all three major indices are now trading higher In 2024, building on strong gains from the final quarter of 2023 as the market priced in a dovish pivot from the Federal Reserve, although the timing of the first cut remains uncertain.

Expectations for a March rate cut by the Federal Reserve have eased to 50/50, down from 85% at the end of December. A series of strong data and hawkish Fed comments have cast doubts over an early Fed rate cut.

The market will now look ahead to Thursday's Q4 GDP data on Friday’s core PCE figures, the Federal Reserve's preferred measure for inflation, to further assess the timing surrounding a move by the US central bank.

Also, with Fed rate cut expectations, earnings season is very much in focus as it ramps up this week, with earnings due from Netflix tomorrow and Tesla on Wednesday.

Corporate news

Boeing is set for a lower open after the US Aviation Authority recommended further inspection of the 737-900 ER jet after the mid-air incidents at the start of the year.

Macy’s is pointing to a 2% rise on the open after rejecting a takeover bid at the weekend. The department store chain rejected a $5.8 billion proposal by Arkhouse Management and partner Brigade Capital Management.

S&P 500  forecast – technical analysis

The S&P 500 bounced off the lower bound of the rising channel and has shot higher to fresh all-time highs. Buyers could be encouraged by the RSI while it remains out of overbought territory and could look towards 4900 ahead of 5000. Support can be seen at 4795 the December high, with a break below here opening the door to 4700.

FX markets – USD falls GBP/USD rises

The USD is holding steady at the start of the week after gains in the previous week after investors reined in Federal Reserve rate cut expectations. U.S. dollar traders will be looking ahead to US Q4 GDP and core PC data at the end of the week.

EUR/USD is falling, extending losses from last week. The pair remains below the 1.09 level as investors still question the ECB's ability to keep interest rates high for longer. The ECB's rate decision is due on Thursday, and policymakers are expected to leave rates on hold. The meeting may not bring any major surprises after ECB president Christine Lagarde hinted that the central bank could start cutting rates in the summer.

GBP/USD is rising in a quiet start to the week with no high-impacting data due to be released. The pound has held up better than other major pairs, such as the yen and the euro against the dollar, as the Bank of England is widely expected to start cutting interest rates after its major central bank peers.

Oil trades in a familiar range

Oil prices are inching higher after modest gains last week as investors continue to weigh up ongoing geopolitical tensions in the Middle East and a weaker demand outlook.

There are no signs of tensions between Israel and Hamas, and attacks continue in the Red Sea, which is offering a floor to oil prices.

Meanwhile, ample supply combined with concerns over the outlook for China’s economy limits moves to the upside limit. As a result. WTI has tread water around $70 to $75.00 since the start of the year.