Nasdaq 100 Forecast: QQQ rises ahead of a data-heavy week

Article By: ,  Senior Market Analyst

US futures

Dow future 0.11% at 44,920

S&P futures 0.11% at 6034

Nasdaq futures 0.23% at 20950

In Europe

FTSE 0.47 % at 8327

Dax  1.4% at 19906

  • US stocks rise despite Trump’s tariff threats
  • The economic calendar is packed this week with a focus on the NFP
  • US ISM manufacturing PMI data
  • Oil rises after encouraging China data

Stocks inch higher despite Trump’s tariff threats

U.S. stocks are heading for a modestly strong start to December after posting solid gains in the previous month. The mood is cautiously upbeat as traders return from the extended Thanksgiving weekend break, despite more trade tariifs threats from Trump over the weekend.

Trump threatened the BRICS with 100% trade tariffs on any of those nine BRIC countries should they look to move away from the USD.

The market will monitor the results of Black Friday and see Monday sales events for an early indication of the consumer's health and how strong the upcoming holiday shopping season could be.

Attention today will also be on US manufacturing PMI data, which is expected to tick higher to 47.7 in November, up from 46.5, its lowest level this year. Much of the decline had been attributed to uncertainty surrounding the outlook for interest rates and the political outcome of the elections. However, with expectations for further rate cuts, the sector could find support for activity in the coming months.

This week is a busy week for economic data, including service ISM PMIs, plenty of labour market reports and a speech by Fed chair Jerome Powell. The key focus will be on Friday's nonfarm payroll report, where a strong showing could raise questions over whether the Fed will cut rates this month.

Traders are pricing in a 65% probability that the Fed will cut rates by 25 basis points, compared to an almost 80% chance a month earlier.

Corporate news

Stellantis falls after Carlos Tavares, the CEO of the world’s fourth-largest carmaker, steps down. This leaves a void at the top of the company as it struggles to address overcapacity and high inventory levels in the US and as global demand remains weak.

Tesla is set to open 2%  higher after positive comments from analysts. While Roth MKM upgraded the stock to buy, Stifel raised its price target. The moves have added to optimism surrounding the EV maker's future.

Gap is set to open over 4% higher after JP Morgan upwardly revised its rating on the retailer. Analysts at the bank cited the company's progress in developing a consistent playbook of improved merchandise

Nasdaq 100 forecast – technical analysis.

After recovering from the mid-November low of 20,300, the Nasdaq continued to grind higher, supported by the RASI above 50 and rising towards 21,000 and then 21,232 and fresh all-time highs. Immediate support can be seen at 20,750 the July high. Below here is 20,300 at the mid-November low, and 20,000 at the November low come into focus.

FX markets – USD rises, EUR/USD falls

The USD is rising after losses last week, the first weekly decline after 8 weeks of gains. The USD is being lifted by signs that Trump will support a stronger USD after warning BRIC countries not to undermine the UUSD.

EUR/USD is falling amid concerns over political instability in France and after manufacturing PMI data showed an ongoing recession in the sector. French PM Michel Barnier’s fragile coalition government may not last to the end of the week as he tries to push through the Budget without sparking a vote of no confidence.

GBP/USD is falling after the UK manufacturing PMI fell to a nine-month low in November at 48, down from 49.9 in October and below an earlier estimate of 48.6. The level 50 separates expansion from contraction. Worries over tax increases, a 7% rise to Britain's minimum wage, and disruption to shipping in the Red Sea point to an environment of high costs and low demand.

Oil rises after upbeat Chinese data

Oil prices all rose over 1% on Monday, boosted by stronger factory activity in China and escalating tensions in the Middle East, where Israel resumed attacks on Lebanon despite a ceasefire agreement.

Better-than-expected economic data from China, the world's largest oil importer, has eased concerns over the demand outlook, supporting crude prices.

The latest PMI data suggest that stimulus measures are starting to impact economic activity, which should help oil demand over the coming months.

Still, games are limited as traders fret that tensions could widen across the Middle East. A truce between Israel and Lebanon, which took effect last Wednesday, is already failing.

 

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