S&P500 Forecast : Stocks slip ahead of data drop

US futures

Dow futures -0.11% at 34514

S&P futures -0.07% at 4430

Nasdaq futures -0.13% at 15033

In Europe

FTSE +0.70% at 7447

Dax +0.27% at 15840

• US JOLTS job openings & consumer confidence data due
• US pharmaceuticals in focus on Medicare news
• USD rises, tracking yields higher
• Oil rises on supply concerns 

JOLTS job openings & consumer confidence in focus

US stocks are set to open flat as investors look ahead to a US data drop which will shed more light on the health of the US economy.

JOLTS job openings are due set to ease modestly to 9.47 million in July down from 9.58 million in June. This would be the lowest level in almost 2 years but is still indicative of a tight labour market. The data comes ahead of the non-farm payroll on Friday. The labour market has been a central focus for the Fed, with policymakers looking for signs that demand for workers is cooling, which would ease inflationary pressures.

US consumer confidence data is also awaited and is expected to show that morale slipped to 116 from 117.

The data comes after Federal Reserve Powell hinted at more interest rate hikes and higher rates for longer if needed. The CME Fedwatch tool shows that the market is pricing in a 60% probability that interest rates will rise by November.  Strong data today could boost those expectations further.

Corporate news

Pharmaceuticals will be in focus after the Biden administration has named 10 drugs that will be subject to negotiations with Medicare to lower costly medications.

Nio fell 6% after the EV maker posted widening losses after it missed revenue expectations for a fourth quarter.

Best Buy rises 1% after the electronics retailer posted a smaller-than-expected fall in quarterly comparable sales as deeper discounts lured in shoppers.

S&P 500 forecast – technical analysis

S&P500 has risen from Friday’s lows of 4356 but has run into resistance at the 20 sma at 4444. Buyers need to overcome this level to test 4470, Friday’s high and the 50 sma. A move above here could see buyers gain traction towards 4607 and fresh highs. Meanwhile, support can be seen at 4356, last week’s low ahead of 4335 the August low.

FX markets – USD rises, GBP falls

The USD is rising, tracking treasury yields higher ahead of a US data dump shortly. The market is growing in confidence that the Fed will raise interest rates again over the coming months. USD/JPY rose to 147.00 a fresh 2023 high on BoJ-Fed divergence.

EURUSD is falling towards 1.08 after weaker than expected German consumer confidence data. German consumer morale fell to -25.5 in September, down from -24.6 and below forecasts of -24.3. The data suggests that households remain squeezed as inflation remains high and the outlook deteriorates.

GBPUSD is falling after the British Retail Consortium (BRC) reported a cooling in shop prices to 6.5%, its lowest level since October 2022. Food inflation also cooled to 11.5% from over 15%. The data comes after BoE’s Broadbent warned that interest rates may need to stay high for a long period as inflation is still too high.

EUR/USD -0.18% at 1.08

GBP/USD -0.15% at 1.2580

Oil rises for a fourth day on supply worries

Oil is rising for a fourth straight day as concerns over supply overshadow demand worries.

Tropical storm Idalia is heading towards the US Gulf Coast and is expected to cause power outages, potentially impacting oil output on the eastern side of the Gulf Coast. These concerns come hot on the heels of a fire at a Marathon refinery last week, which boosted the price.

That said, the upside could be limited as demand worries in the world’s two largest economies, the US and China continue.

On Friday, the Federal Reserve Chair Jerome Powell hinted at further interest rate hikes to cool inflation, which hurting the oil demand outlook. Meanwhile, China’s post-pandemic recovery is showing signs of stalling amid a worsening property slump and falling consumer spending.

WTI crude trades +0.8% at $80.60

Brent trades  +0.8% at $82.84.56

Looking ahead

15:00 US consumer confidence 

15:00 US JOLTS job openings