The week started quietly
S&P500
The US market is in a range.
US indexes showed gains at the week's close. The Dow added 0.1%, while the NASDAQ remained unchanged. The S&P500 rose 0.15%.
On Friday, at the opening of the markets, the US indexes fell sharply by 1%, but by the end of the day, a bullish reversal took place. The S&P500 future rose 0.4%.
Asian indexes changed little at the start of the week. Japan indicators remained unchanged, while China indexes were up 0.1%.
Energy sector. Oil prices have been rising strongly over the past few days. In a week, Brent crude oil futures for November were up 7%, or $5, to 79.15. Oil prices have been rallying amid concerns about supply as demand picks up in parts of the world and a steady fall in US crude inventories in recent months. Europe's spot gas price reached a record-high $865 per 1,000 cubic meters. It could cause high electricity costs and increase inflation in the EU. The issue of gas prices has become the main topic of discussion in Europe. Germany's energy minister assured that the reserves in the country's gas storage facilities were sufficient, although lower than last year. In the UK, the situation with gas reserves had got worse rather than better.
COVID-19 worldwide. The number of coronavirus cases decreased slightly over the weekend. Yesterday, the number of new infections in the world increased by 325K, while in the United States it rose by 25K.
The 2021 German federal election was held on 26 September 2021. The SPD, led by Olaf Scholz, secured 25.7% of the vote, while the CDU-CSU bloc, helmed by Armin Laschet, got 24.1%, according to preliminary figures. The Greens secured their best score ever in a federal election, coming in third with 14.5% of the vote. The FDP came behind them with 11.5% of ballots to take 92 seats. So, currently Laschet and Scholz stake rival claims to lead Germany.
The S&P500 index is at 4,455 and is expected to trade in the 4410–4490 range. House Speaker Nancy Pelosi plans to pass a $1 trillion infrastructure bill by the end of the week. The US housing market continues to grow. New home sales in August rose to 740,000 from 708,000 a month earlier, higher than estimated.
On October 1, the PCE inflation report and ISM manufacturing index will be released. ISM is estimated to increase to 59.5-60.5 from 59.50 last month. Economists also expect durable goods orders excluding transportation slip 0.6.%.
US GDP (third reading of Q2) will be released on Thursday and will not affect the market.
The US dollar index is trading at 93.20 and is expected to be in the 92.90–93.50 range. The dollar index has been remaining in a range-bound since last Tuesday. Perhaps a new wave of growth will come after the next Fed meeting.
USD/CAD is trading at 1.2620 and is likely to be in the 1.2580–1.2650 range. The continuing rise in oil prices is putting more downward pressure on the currency pair. A downward breakout is possible.
Conclusion: The US market is in a range. US market dynamics are expected by Monday's close.