S&P500
The US market is ready for a new wave of growth.
On Wednesday, the US stock market was bullish amid a strong employment report in the US. The Dow added 0.3%, the NASDAQ gained 0.5%, and the S&P500 was up by 0.4%.
Japan's indices increased by 0.8% in the morning, following a bullish US stock market.
The S&P500 index is trading at 4,363 and is expected to be in the 4,340–4,400 range. A slight increase in US stocks yesterday does not reflect the bigger picture. The fact is that the market was bearish on Wednesday morning. Later, however, the uptrend resumed. As a result, indices scored gains of at least 1%. The market received support from the ADP employment change report for September. Employment increased by +568K, beating market expectations of a +450-500K growth. The market awaits the release of the US Labor Department report on Friday.
The US stock market is ready to extend gains. Investors are willing to buy, suggesting that the correction has ended.
Brent fell from the high of $83.50 per barrel yesterday. Nevertheless, the benchmark keeps trading above $80 per barrel. US crude oil inventories expanded by 2.5 million barrels yesterday.
The energy crisis in Europe is still making headlines worldwide. Yesterday, gas futures on the ICE exchange jumped to $1,750 per 1,000 cubic meters. The EU officials are planning to discuss the crisis situation next week. Consumers that have long-term contracts with Gazprom, can buy natural gas at a reasonable price. Meanwhile, those who ordered an insufficient amount of gas now have to pay an exorbitant price. Russia's Energy Minister Alexander Novak said that in order to stabilize prices, the EU should complete a certification of Nord Stream 2.
US President Joe Biden piled pressure on congressional Republicans to vote for a debt ceiling increase in a meeting with business leaders. The president said that without raising the debt limit, the government would no longer be able to pay its bills by October 18.
The IMF suggests global inflation will slow down in the first six months of 2022. In developed countries, inflation is estimated to rise to 3.6% by the end of 2021 and accelerate to 6.8% in emerging markets. In addition, the IMF says global economic growth will fall slightly below its July forecast of 6% in 2021 due to rising inflation and a slow pace of vaccination.
USDX is trading at 94.20 and is expected to be in the 93.90–94.50 range. The greenback is strengthening amid the debt limit issue, a bullish US stock market, a high global inflation rate. All this is likely to urge the Fed to tighten monetary policy. This, in turn, should boost the yield on US Treasuries.
USDCAD is trading at 1.2590 and is expected to be in the 1.2500–1.2650 range. The pair is hovering around the bottom of the range and is expected to plunge to 1.2500.
The US market is ready for a new wave of growth.