OptionsPlayers OP Wire: Key Market and Economic Updates
- Futures Hold Steady as Markets Near Record Highs
U.S. stock futures remained relatively unchanged on Monday, with markets hovering close to record highs. This stability follows the Federal Reserve’s clear signal that a rate cut is likely next month. The S&P 500 closed Friday within 1% of its all-time high set in mid-July. The major indexes rallied after Fed Chair Jerome Powell announced that “the time has come” to lower the federal funds target rate, noting that “the upside risks of inflation have diminished.” These remarks have all but guaranteed a rate cut at the Fed’s meeting on September 18, the first in over four years. - Critical U.S. Economic Data on Deck
This week, the Fed will consider a series of economic indicators before making its September rate decision. Key data include the Commerce Department’s revised second-quarter GDP and the comprehensive Personal Consumption Expenditures (PCE) report, which encompasses the Fed’s preferred inflation measure, the PCE price index. Although recent Fed comments suggest a shift in focus toward labor market risks, Friday’s PCE data will still be crucial. The economic calendar also features a report on durable goods orders later today and the weekly initial jobless claims report on Thursday. - Nvidia Earnings to Test Market Sentiment
U.S. markets face a significant test with Nvidia’s earnings report, scheduled for release after the market closes on Wednesday. Nvidia, a key player in the AI sector, has seen its stock surge by approximately 150% year-to-date, contributing around a quarter of the S&P 500’s 17% year-to-date gain. However, comparisons to the dot-com bubble have surfaced amid concerns over the sustainability of its growth. Nvidia’s earnings and forward guidance on corporate AI investment will be pivotal in shaping market sentiment as we approach a historically volatile period. - Oil Prices Climb Amid Middle East Tensions and Rate Cut Hopes
Oil prices rose on Monday due to concerns over potential disruptions to regional oil supplies if Middle East conflicts escalate, coupled with optimism that imminent U.S. rate cuts could boost global economic and fuel demand. Both major oil benchmarks saw gains of over 2% on Friday as expectations for a September Fed rate cut solidified. However, oil prices still ended the week lower due to a bleak outlook for major economies impacting fuel demand. Traders remain cautious about OPEC+ plans to increase output later this year. - NASA Chooses SpaceX Over Boeing Amid Safety Concerns
NASA announced on Saturday that it would be too risky to bring two astronauts stranded aboard the International Space Station (ISS) back in Boeing’s malfunctioning new capsule. Instead, the astronauts will return in a SpaceX craft in early 2025. Astronauts Butch Wilmore and Sunita Williams have been stuck on the ISS since June after Boeing’s Starliner capsule encountered issues during a test flight. The decision to use SpaceX underscores growing concerns over Boeing’s safety standards, especially following the scrutiny of its commercial aircraft. SpaceX, which has a contract with NASA for ISS cargo supply, has completed nine successful missions to and from the ISS as of April 2024.
SPY/SPX –
The main focus last week was how price trades versus the recent daily pivot at 5600, which loosely aligns with last week’s high. If last week’s buying activity continues, price will target 5630, 5650, and the all-time high near 5720… Given that price has shown 7 consecutive days higher, we would not be surprised to see weakness or consolidation early in the week.” Last week’s action fit the commentary nicely, with price developing and trading within a near-term range… All while continuing to hold the key 5600 area as support.
For this coming week, the main focus will be on how price trades versus the near-term range [5585×5665]. For the next multi-day directional move, price will need to break this range with acceptance shown outside of the range. The main level of interest for this week is the near-term range high at 5665. If buyers can trigger a breakout, price will target 5700, 5720, and 5775. If sellers continue to defend 5665, price will retest the key daily pivot near 5600, then the near-term range low at 5585. Acceptance below 5585 would target 5565 and 5525.
Upside levels of interest: 5665, 5700, 5720, 5775
Downside levels of interest: 5600, 5585, 5565, 5525
Notable Economic Data
- Thursday: GDP, Jobless Claims
- Friday: Core PCE Price Index, Michigan Consumer Sentiment
Notable Earnings
- Wednesday: NVDA (potentially market moving)
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