US500 braced for jam-packed week

US500 ↓ 4% month-to-date

High impact events could rock index

Fed decision, earnings & NFP in focus

Key levels of interest at 5129, 5034 & 4970

Major breakout on horizon?

If you thought the last few days were eventful, wait until you see the lineup for the week ahead!

A mashup up of high-impact data, corporate earnings, and the Fed rate decision will be in focus:

Saturday, 27th April

CN50: China industrial profits

Monday, 29th April

EU50: Eurozone economic & consumer confidence
GER40: Germany CPI
SG20: Singapore unemployment
CN50: Chinese megabank earnings

Tuesday, 30th April

AU200: Australia retail sales
CN50: China Caixin manufacturing PMI, non-manufacturing PMI
EU50: Eurozone CPI, GDP
GER40: Germany GDP, unemployment
JP225: Japan unemployment, industrial production, retail sales
TWN: Taiwan GDP
UK100: HSBC earnings
US500: Amazon earnings

Wednesday, 1st May

NZD: New Zealand unemployment, RBNZ financial stability report
GBP: UK S&P Global Manufacturing PMI
USD: US construction spending, ISM manufacturing
US500: Fed rate decision

Thursday, 2nd May

AUD: Australia building approvals, trade balance
EUR: Eurozone S&P Global Manufacturing PMI
GER40: Germany S&P Manufacturing PMI
HK50: Hong Kong GDP
TWN: Taiwan S&P Global Manufacturing PMI
GBP: UK holds local elections
USD: US factory orders, initial jobless claims
JPY: BoJ March meeting minutes
NAS100: Apple earnings

Friday, 3rd May

EUR: Eurozone unemployment
HK50: Hong Kong retail sales
SG20: Singapore retail sales
US500: US April jobs report, ISM services, Fed speech

Volatility could be the name of the game due to the scheduled releases and high-risk events.

The spotlight shines on the US500 which is down almost 4% month-to-date as of writing.

Note: US500 tracks the S&P 500 index – the benchmark used to measure the stock performance of the largest listed US companies.

Here are 4 reasons why the US500 could see more big moves:

1) Fed rate decisions

The Fed is widely expected to leave interest rates unchanged next week.

Despite the US economy growing less than expected in Q1, sticky inflation and hawkish comments by Fed officials have cooled Fed rate cut bets for 2024. Much attention will be directed towards the policy statement and Fed Chair Jerome Powell’s conference for fresh clues on the central bank’s next move.

Traders are currently pricing in only a 35% probability of a 25-basis point cut in July with this jumping to 75% by September.

Note: The incoming PCE report this afternoon could impact these odds.

Given how tech stocks account for roughly 29% of the S&P 500 weighting, the Fed decision could spark volatility.

Note: Tech stocks are influenced by interest rates because their value is based on earnings forecasted in the future.

2) Apple & Amazon earnings

Four of the so-called “Magnificent 7” tech titans have already reported their earnings, with the spotlight now on Amazon and Apple in the week ahead.

Big tech earnings have satisfied expectations so far with stellar results from Microsoft and Alphabet boosting risk sentiment. The bar has been set high with investors looking for solid earnings from the remaining tech giants to keep the market rally alive. Given how Apple and Amazon are in the top 5 weighting of the S&P 500:

A set of positive earnings may push the index higher.

Should earnings miss forecasts, this could send the index lower.

3) US April NFP report

Markets expect the US economy to have created 250,000 jobs in April, compared to the 303,000 in the previous month. The unemployment rate is forecast to remain unchanged at 3.8% while average earnings are forecast to stay at 0.3% MoM.

A stronger-than-expected US jobs report could support the “higher for longer” narrative on rates, hitting the US500 as a result.

However, evidence of a cooling US jobs market could boost bets around lower US rates, which could support the US500.

4) Technical forces

The US500 looks noisy on the daily charts thanks to fundamental forces but bulls seem to be in the vicinity. Prices are trading above the 100-day SMA but resistance can be found at the 50-day SMA.