- U.S. Futures Point Higher U.S. stock futures showed a positive trend on Monday, indicating optimism among traders ahead of a crucial Federal Reserve interest rate decision and upcoming corporate earnings reports. The previous session saw main indices closing in the green, boosted by encouraging quarterly results from Alphabet and Microsoft, leading to the largest weekly gains since November 2023. Additionally, new data revealing a slight acceleration in U.S. inflation in March provided hope for a potential rate reduction by the Fed, soothing concerns over stagflation.
- Fed Rate Decision Ahead The Federal Reserve is scheduled to release its latest rate announcement on Wednesday, with markets not expecting any alteration in borrowing costs from the current high range. Attention will be focused on comments from Fed Chair Jerome Powell, who recently indicated caution due to persistently elevated prices and strong economic activity. Analysts warn of potential delays in bringing interest rates to a more neutral level, emphasizing the need for careful monitoring of the Fed’s approach.
- Amazon, Apple Highlight Weekly Earnings Parade This week’s corporate results will be headlined by Amazon and Apple. Investors are keen to see if Amazon’s cost-cutting efforts continue to drive profits, while Apple’s earnings report will shed light on iPhone shipments and the performance of its Services division. Expectations are high for both companies, with a focus on their plans for integrating artificial intelligence following recent announcements from tech peers.
- Tesla to Partner with Baidu for Self-Driving Rollout in China Tesla has struck a deal with Baidu to implement advanced full self-driving (FSD) features in China, utilizing Baidu’s mapping and navigation functions. This partnership will enable Tesla to overcome regulatory hurdles and potentially offer FSD technology in the country, following CEO Elon Musk’s visit to China over the weekend.
- Oil Prices Dip Oil prices experienced a sharp decline on Monday amid peace talks between Israel and Hamas, easing concerns of a wider conflict in the Middle East and potential disruptions to oil supplies. Talks in Cairo aimed at securing a ceasefire signal progress towards stability in the region, impacting oil market sentiment.
SPX/SPY- Last week we asked-
Do Buyers Step In This Week?” as price tested a key area of support in the 5000 area. “The daily chart now showed 6 consecutive days lower, so a bounce was expected.
That bounce came on Monday and carried into Wednesday, when price tested a key resistance area near 5120. Selling activity was seen versus this zone, however, the move lower failed to gain any traction and by Friday fresh highs for the week were being made. Despite last week’s volatility, the weekly candle closed as an inside bar.
For the week ahead, the main focus will be on how price trades versus the prior week’s inside bar, with a specific focus on the 5120 level of interest. Was last week’s bounce simply a short-covering rally into the 50% retracement level, enabling sellers to reload for the next leg lower? Buyers will be looking for an upside break of the inside week, which would target 5185, 5205, and 5260. If sellers break and hold below 5120, price would target 5080, 5030, and 5000.
Quick Reference:
Upside levels of interest: 5185, 5205, 5260
Downside levels of interest: 5120, 5030, 5000
Notable Economic Data
- Wednesday: FOMC
- Thursday: Jobless Claims
- Friday: NFP
Notable Earnings
- Tuesday: AMD, AMZN
- Thursday: AAPL, COIN
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