Nasdaq 100 Forecast: QQQ eases ahead of Powell & a busy week for data

US futures

Dow future -0.16% at 42223

S&P futures -0.17% at 5724

Nasdaq futures -0.2% at 19965

In Europe

FTSE -0.43% at 8281

Dax -0.64% at 19356

• Stocks pause after record highs last week
• Fed Chair Powell is due to speak
• US NFP & ISM services & manufacturing data in focus this week
• Oil falls, extending last week’s losses

US stocks pause near record highs

U.S. stocks are pointing to a muted start after record highs in the previous week, as traders look cautiously ahead to a speech by Federal Reserve chair Jerome Powell later today and US non-farm payroll figures on Friday.

While the S&P500 and the NASDAQ 100 are muted ahead of the open Chinese ADRS, they are on track for another strong session after the latest moves by the Chinese authorities to boost growth in the world's second-largest economy.

While stocks in Europe have struggled this morning, Chinese equities have surged, with investors panicking to buy ahead of tomorrow's Chinese public holiday. The China CSI 300 rose 9.8% today, its strongest daily performance since the global financial crisis.

Looking ahead, the US economic calendar is relatively quiet. Today, attention will be on Federal Reserve chair Jerome Powell, who could offer further insight into the size of the Fed's next rate cut: The market is pricing in a 54% probability of a 50 basis point rate cut and a 46% chance for a 25 basis point cut.

Looking out across the week, the economic calendar will pick up with ISM services and manufacturing PMIs, JOLTS job openings, and ADP private payrolls ahead of Friday's nonfarm payroll report.

Corporate news

Stellantis is set to fall 13% on the open after the auto giant slashed its annual forecast and said it would burn through more cash than expected amid worsening trends in the broader industry - higher costs to overhaul its US business and Chinese competition on EVs.

Ford is set to fall 3.3%, and General Motors is on track to drop 3.5% lower after Stellanti's comments about rising Chinese competition in EVs.

Boeing is set to fall on the open after the International Association of Machinists and Aerospace Workers said on Friday that its talks with the aircraft manufacturer had collapsed and there were no further dates for negotiations at this time.

Nio is set to open 12% higher after the EV maker unveiled a new cash injection of almost $2 billion from an existing shareholder.

Nasdaq 100 forecast – technical analysis.

After breaking out of the symmetrical triangle, the Nasdaq 100 rose above 20k to 20,315, before correcting lower and testing 20k support. Buyers, supported by the RSI above 50, will look to retake 20315 to rise towards 20750 and fresh all-time highs. Sellers will need to fall below 20k and the 50 SMA at 19230 to negate the near-term uptrend.

FX markets – USD falls, EUR/USD rises

USD is falling to fresh 14-month lows on expectations that the Federal Reserve will continue cutting interest rates over the coming months. Federal Reserve chair Jerome Powell is due to speak later, which could influence the USD.

EUR/USD is rising, capitalizing on the weaker USD despite cooler-than-expected German inflation data. CPI in the eurozone's largest economy cooled further below the ECB's target of 2% to 1.6%, down from 1.9% in August, adding to expectations that the ECB will cut rates again in October

GBP/USD is rising, building on gains from the previous week amid a softer U.S. dollar and despite a downgrade to UK growth. UK GDP was downwardly revised to 0.5% QoQ from 0.6% in a blow to newly elected Prime Minister Kier Starmer ahead of the budget at the end of October. The BoE expects growth to cool further in the current quarter to 0.3% amid a cautious mood ahead of the budget where the chancellor is set to hike taxes.

Oil extends losses from last week.

Oil prices are falling lower after booking losses of 5% last week, as analysts cut their 2024 oil price forecast for a fifth straight month.

The recent weakness in oil prices came amid concerns over how and when OPEC will return barrels to the market. The oil cartel is expected to press ahead with an increase of 180,000 barrels per day as of December 1st. Meanwhile, Saudi Arabia has also abandoned its $100 a barrel target, suggesting that the world's largest oil producer is accepting of a period of low oil prices.

Meanwhile, global oil demand is expected to grow by 0.9 to 1.2 million barrels per day in 2024, down from estimates of 1 to 1.3 million barrels per day expected previously.

Interestingly oil is one of the few commodities that failed to rally on news of the Chinese stimulus despite China being the world's largest oil importer.

This suggests that the market is more concerned about the oversupply than the demand outlook right now.