S&P500 Forecast: SPX steady at record high as earnings roll in

US futures

Dow future -0.03% at 43083

S&P futures -0.01% at 5865

Nasdaq futures 0.01% at 20440

In Europe

FTSE -0.29% at 8263

Dax 0.35% at 19568

Stocks steady after record highs
Earnings in focus amid a quiet economic calendar
BAC & GS beat forecasts
Oil tumbles to $70 as the risk premium falls

Stocks steady after record highs

U.S. stocks are set for a subdued start as investors pause for breath after a stellar rally in the previous session, which saw stocks reach record highs.

Three major indices rose on Monday, with the S&P500 and the Dow Jones reaching record highs for a second straight session amid optimism over a strong Q3 earnings season and a rally in tech stocks.

Equities seem unfazed by expectations that the Federal Reserve could be cutting interest rates at a slower pace than initially expected. Yesterday, Fed governor Waller signaled that future interest rates will be less aggressive than the large move seen in September; he raised concerns that the economy could still be running at a hotter-than-desired pace.

Waller’s comments come after recent reports on employment inflation and GDP, which suggest that the economy may not be slowing as much as previously thought.

The market is pricing in about an 86% probability that the Fed will cut rates by 25 basis points in November and a slight chance it could leave rates unchanged. Today, the US economic calendar is quiet with speeches from Federal Reserve officials, including Mary Daly and Raphael Bostic, scheduled.

Amid a sparse economic calendar today, the focus is squarely on earnings with numbers from major banks, including Bank of America and Goldman Sachs, among others.

Corporate news

Goldman Sachs is set to open higher after the investment bank posted Q3 earnings that beat expectations. The global banking and markets division performed strongly, generating net quarterly revenues of $8.55 billion.

Bank of America will open higher after-earnings beat expectations, as higher investment banking fees helped offset the slight year-on-year decline in net interest income.

Walgreens Boots Alliance is set to open over 6% higher after the pharmacy chain said it would shut 1,200 stores over the next three years. It also beat Wall Street's estimates for fourth-quarter adjusted profit.

Oil majors such as Exxon Mobile and Chevron are falling, tracking a sharp decline in oil prices.

S&P500 forecast – technical analysis.

S&P 500 broke out of its recent range, rising to fresh all-time highs of 5800. Buyers will look to extend gains towards 6000. However, the RSI is on the brink of overbought territory, so buyers should be cautious. Support can be seen at 5775, the rising trendline support, and the upper band of the previous range. It would take a break below 5665 to create a lower low.

FX markets – USD falls, GBP/USD rises

USD is easing lower but continues to trade around a 2 1/2 month high supported by expectations that the Federal Reserve will cut interest rates gradually. The US economic calendar is quiet. The focus will be on three Fed speakers.

EUR/USD is unchanged after German zed EW economic sentiment improved by more than expected in October to 13.1 up from 3.6, owing to optimism on inflation and ECB interest rate cuts. The ECB is expected to cut rates again on Thursday.

GBP/USD is rising after UK unemployment unexpectedly ticked lower to 4%, down from 4.1%, highlighting the resilience of the UK labour market. Wage growth cooled to 4.9%, down from 5.1%, in line with expectations. UK inflation data is due tomorrow.

Oil tumbles as the risk premium falls

Oil prices are extending losses, dropping 4% today amid a weaker demand outlook and as the risk premium on oil falls.

Media reports have said that Israel is willing not to strike Iranian oil infrastructure targets, calming fears of a supply disruption in the Middle East. As the risk premium falls, oil prices have dropped lower.

Furthermore, the oil demand outlook is also deteriorating. Both OPEC and the IEA cut their forecasts for global demand growth in 2024, with China accounting for the bulk of those downgrades.

While China announced stimulus packages in recent weeks the market is unconvinced that this is enough to revive strong growth.

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.