Nasdaq 100 Forecast :Stocks slip as NFP smashes forecasts

Congress building
Fiona Cincotta
By :  ,  Senior Market Analyst

US futures

Dow futures -0.71% at 32870

S&P futures -1.1% at 4210

Nasdaq futures -1.35% at 14529

In Europe

FTSE +0.06% at 7454

Dax -0.2% at 15040

  • US NFP sees 336k jobs added vs 170k expected
  • Data boosts the case for another rate hike
  • USD set for a 14th straight weekly rise
  • Oil is set to drop around 10% this week

US NFP boosts the case for another rate hike

U.S. stocks are pointing to a weaker start after U.S. non-farm payroll smashed forecasts raising concerns that the Federal Reserve will need to keep interest rates higher for longer.

The non-farm payroll headline figure showed 336,000 jobs were added In September, almost double the 170,000 forecast and above the upwardly revised 227,000 added in August. Interestingly despite this strong job growth, unemployment defied expectations and held steady at 3.8%. Forecasts had been for a fall to 3.7%. Furthermore, wage growth eased slightly in September to 4.2% annually down from 4.3% in August.

The impressively strong jobs creation is driving the market's reaction, with stocks falling sharply lower and the US dollar rising as the data fuels bets that the Federal Reserve will raise interest rates again in the November meeting.

The data comes as U.S. stocks are set to fall across the week, marking the fifth straight weekly decline. Stocks have come under pressure as treasury yields have rallied, spiking to the highest level in 16 years this week on concerns that the Federal Reserve could raise interest rates again in 2023 and keep rates higher for longer in order to tame inflation.

Looking ahead, investors will be watching a speech by fed official Christopher Waller, he could shed more light on the future path for interest rates.

Corporate news

Exxon Mobil is expected to fall on the open, while Pioneer Natural Resource is set to rise over 10% after the Wall Street Journal reported that XOM was negotiating to buy the shale driller for a deal that could amount to $60 billion.

Tesla is set to fall on the open after the EV maker cut the prices of some Model 3 and Model Y versions in the US after reporting Q3 deliveries that missed forecasts.

Phillips's ADRs point to a weaker open after US drug regulator the FDA criticized its handling of the recall of millions of ventilators and said that more testing was needed.

Nasdaq 100 forecast – technical analysis.

After consolidating between 14550 and 14900 across the past two weeks, the price is again testing the lower band at 14550. The 20 sma crossing below the 100 sma and the RSI below 50 keep sellers hopeful of further losses. If sellers break below 14550 and 14440, the weekly low, the door opens towards 14000 round number. Any recovery would need to rise above 14900, the October high and the 20 sma.

Nasdaq 100 forecast chart

FX markets –USD rises, EUR drops

The USD is rising as investors digested the latest U S jobs data. The USD index is set to rise for a 14th straight week as the Fed is expected to adopt a more hawkish stance than it peers in the November meeting and beyond.

EUR/USD is falling despite German factory orders coming in higher than expected at 3.9% after falling 11. 3% in the previous month. The data came after German exports dropped by 1.2% in August, more than economists had forecast, and as the Bundesbank said, the German economy may have contracted again in the third quarter. Concerns over the outlook for the German and, more broadly, the eurozone economy in the second half of the year could mean that the ECB has reached the end of its hiking cycle.

GBP/USD is falling on USD strength and is on track to fall across the week after mixed UK economic data. Earlier in the week, the services PMI contracted by less than expected. However, data yesterday showed that the construction sector contracted sharply last month. Separately, the nationwide house price index showed that prices fell by the steepest amount in September since 2009.

EUR/USD -0.57% at 1.0494

GBP/USD -0.6% at 1.2120

Oil is set for a steep weekly fall

Oil prices are holding steady on Friday but are on course for a weekly loss as demand concerns and a partial lifting of Russia's fuel export ban overshadow tight supply concerns.

Russia announced that it has partially lifted a ban on diesel exports for supplies delivered to ports by pipeline. The ban, if lifted, on the condition that at least 50% of companies' diesel production is sold in the domestic market. For now, the ban on all gasoline exports remains in place.

Brent and WTI are on track to lose 12% and 9%, respectively across the week on fears that higher interest rates for longer will slow global growth and hurt the demand outlook.

These demand concerns have overshadowed Saudi Arabia and Russia’s confirmation this week that they will continue with their supply cuts until the end of the year.

WTI crude trades -0.05% at $81.40

Brent trades -0.05% at $83.60

Looking ahead

14:00 Fed Waller

 

 

 

Related tags: US Open USD Oil Nasdaq

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