Weekly S&P 500 Trends: Slightly Upward to Neutral
- S&P The 500 and Nasdaq 100 are likely to recover in the next few days and weeks.
- US economic resilience and slowing inflation pressures should support risky assets.
- Traders should watch how the Fed’s monetary policy expectations evolve to get further guidance on the trend.
Most read: The U.S. Dollar Maintains a Positive Bias as Economic Resilience Gives the Fed No Reason to Pivot
After selling off in August, US stocks have started to rebound in September. (at least until Friday morning before the long weekend) although Seasonal Negative Factors Associated with the last month of summer can complicate the bounce attempt. in any case It is important to emphasize that there are still developments that can still support risky assets and Limit further downward movement towards the end of the year.. For example The economy has improved unbelievably. Even with many gusts of wind with the latest production and labor market back up results this argument
employmenthire momentumWhile cooler compared to the strong after the epidemic paceThere is still considerable flexibility for countries navigating choppy waters and likely end of business cycle this situation will continue to spend, The main drivers of the US economy focus on consumption. floatIncrease the chances of a soft landing.. Under this circumstance The company’s earnings may continue to weaken. but will not suffer disaster normal in a recession.
focus on consumer prices Inflation remains at its highest level in decades. and more than four times above we The central bank’s long-term target of 2.0%, but is showing signs of cooling. This is partly due to lower energy costs. Average hourly earnings remain moderate. As seen in the August NFP report, which may be helped by a sharp increase in attendance rates from 62.1% to 62.4%, the availability of more workforce is certainly good news as it should be. alleviate the pressure on wagesmake it easier for Federal Reserve Bank to Trust the sky-high CPI readings..
With the inflation indicator moving in the right direction The Fed may be less active But it’s still too early to be positioned for. “Eased monetary policy” especially after the Jackson Hole symposium on FOMC The chairman pointed out that price stabilization must be maintained for a period of time. Warn of premature changes.
Long-term higher interest rates are a Formula for Unpredictable Volatility and Swings in the stock market, but economic flexibility The latest data that clearly confirms the overwhelming pessimism on Wall Street should ease concerns at the country and the organization. profit heading towards the cliff Compared to this backdrop There may be room for a small rebound on the S&P 500 and Nasdaq 100 in the coming days and weeks. But recovery tends to be stronger than straight lines.
S&P 500 15-minute chart
S&P 500 charts prepared using TradingView.
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—Written by Diego Colman, DailyFX Market Strategist.