Image Souce: Krish Capital Pty Ltd

Index Update

US stocks closed mixed on Tuesday as tech shares fueled gains ahead of key earnings and economic data. The Nasdaq 100 surged 1%, nearing a record high, while the S&P 500 rose 0.2% and the Dow fell 0.3%. Labor reports showed declining job openings, hinting at a cooling job market ahead of the Fed's November rate decision. All eyes on the upcoming data!

Market Movers

Alphabet gained 1.8% pre-earnings despite antitrust concerns, while Apple (+0.1%) and AMD (+3.9%) are in focus. McDonald's dropped 0.6% on weaker international sales, and Ford plunged 8.5% after cutting its earnings forecast. Pfizer fell 1.4% despite a strong Q3.

Macro Update 
The US economy grew at an annualized rate of 2.8% in Q3 2024, falling short of 3% forecasts. Personal spending surged 3.7%, the fastest since Q1 2023, driven by a 6% jump in goods consumption. Gov spending rose 5%, while net trade's impact improved. However, private inventories and fixed investment lagged. A mixed bag for growth!

Commodity Update

Brent crude oil futures climbed to ~$71.7/bbl after an unexpected drawdown in US stockpiles, with inventories falling by 0.6M barrels instead of the expected build. Yet, a downside bias lingers due to weak fundamentals and ample supply. Meanwhile, gold hit nearly $2,790/oz, a new record, as investors weighed labor data and geopolitical risks ahead of the US elections. The JOLTS report showed job openings at their lowest since 2021, affecting Fed rate cut expectations. All eyes are on key data releases this week, including PCE inflation and Q3 GDP estimates, as markets navigate geopolitical tensions and the upcoming election.

Future Markets

The DAX fell 0.5% to around 19,370 on Wednesday, following European peers lower as investors digest key economic data and earnings reports. Germany's economy unexpectedly expanded 0.2% in Q3, defying forecasts of a contraction, but Q2 GDP was revised down. Inflation in German states accelerated in October, keeping traders on edge. All eyes are on upcoming inflation readings for Germany, Eurozone growth figures, and the UK budget announcement later today. On the corporate front, Fresenius (-2.7%), Infineon (-2.2%), and Sartorius (-1.1%) faced sharp losses, while Volkswagen gained 2% despite a 42% drop in operating profit.

On Monday, the major U.S. stock indexes experienced gains, but on Tuesday, they returned to the mixed performance that characterized the end of the previous week. The tech-heavy Nasdaq achieved a notable increase, reaching a new record closing high, while the Dow marked its sixth decline in the last seven sessions. The Nasdaq rose by 145.56 points, or 0.8 percent, finishing at 18,712.75 and extending its winning streak to four days. Similarly, the S&P 500 increased by 9.40 points, or 0.16 percent, closing at 5,832.91. From a technical analysis perspective, the S&P 500 appears to be forming a rising wedge pattern, which could raise concerns due to the potential for significant price fluctuations amidst this upward trend. Moreover, the 14-period RSI shows a bearish divergence compared to the price movement, indicating a potentially negative outlook. Traders should keep an eye on key price levels, with resistance identified at 5,880 and support around 5,740.

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