S&P500 Forecast: Stocks rise as Jackson Hole comes into focus

Congress building
Fiona Cincotta
By :  ,  Senior Market Analyst

US futures

Dow futures +0.12% at 34556

S&P futures +0.3% at 4384

Nasdaq futures +0.5% at 14768

In Europe

FTSE +0.14% at 7273

Dax +1.38% at 15650

  • Stocks steady after losses last week
  • Palo Alto Network jumps on upbeat guidance
  • Zoom to report after the close
  • Oil on supply concerns after losses last week 

Stocks steady after last week’s losses

US stocks are set to open higher after booking losses in the previous week amid concerns over higher interest rates for longer in the US and sluggish economic growth in China.

A series of weaker than expected data from China and renewed worries surrounding the crucial property sector, combined with hawkish minutes to the July FOMC meeting, proved to be a toxic combination, sending the three main indices on Wall Street lower last week.

As the new week begins, the market mood has improved slightly as investors look ahead to Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday.

However, Powell is unlikely to sing victory at Jackson Hole. While the economy is in a much better place than it was a year ago, inflation is still above the 2% target and the Fed can’t be sure that they have done enough to control prices.

Ahead of Friday’s speech, earnings will be in focus, particularly Nvidia on Wednesday, which could show the market’s appetite or lack of appetite for risk.

Corporate news

Palo Alto Networks jumps 12% after mixed earnings but strong guidance from the cyber security firm. While it beat on profits, revenue came in below forecasts. However, fiscal Q1 EPS guidance was well ahead of forecasts.

Zoom will report after the close after the share price has been hit by the return to offices and growing competition. Zoom has outlined plans to use AI to boost the businesses but investors seem unconvinced andtr he share price trades 8% lower this year.

Meta rises after the social media platform announced that it would roll out a web version of Threads. The number of daily active users has fallen to 10 million, down from 50 million the days after launch.

Nvidia rises as investors continue to pile in ahead of earnings on Wednesday, which analysts are suggesting could be ahead of forecasts.

S&P500 forecast – technical analysis

The S&P500 broke out of its rising channel, breaking below the 50 sma before finding support at 4335, a level that sellers will need to break below to extend the bearish trend towards 4310 the 100 sma and 4300 the round number. On the upside, buyers could be encouraged by the long lower wick on Friday’s candle. Buyers will look to rise above 4460, the 50 sma and June high.


FX markets – USD falls, EUR rises

The USD is pausing for breath after strong gains across the past five weeks amid expectations that the Fed will continue to raise rates and keep rates higher for longer. Today, the improved market mood is pulling USD lower.

EURUSD is rising despite German PPI falling by more than expected in July. PPI fell -6% YoY, marking the biggest fall since 2009, suggesting that inflationary pressures are falling faster than expected in the eurozone’s largest economy.

GBPUSD is rising, building on gains from the previous week. The pound is rising on betas that the BoE will continue to raise interest rates in order to tame sticky inflation.

EUR/USD +0.28% at 1.0904

GBP/USD +0.25% at 1.2750


Oil rises on a weaker USD & tighter supply

Oil prices are rising after losses last week as tighter supply and a rise in heating oil overshadow concerns over global oil demand.

Oil prices fell last week, ending a 7-week winning run, amid concerns over China’s slowing economic growth and the possibility of higher interest rates for longer in the US suppressing growth.

This week oil prices are rising, supported by a weaker US dollar and signs of tight supply after Saudi Arabia’s shipments to China fell 31% from June.

The market is shrugging off news that the PBoC cut interest rates by less than expected, in a move which suggests that authorities are allowing China’s economy to cool.

WTI crude trades +1.1% at $81.24

Brent trades  +1.1%% at $85.43

Looking ahead





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