S&P500 Forecast: SPX muted ahead of core-PCE data

US futures

Dow future 0.17% at 44,928

S&P futures -0.1% at 6011

Nasdaq futures -0.35% at 208710

In Europe

FTSE -0.11 % at 8252

Dax -0.3% at 19244

US stocks trade quietly ahead of inflation data
GDP and jobless claims point to a solid economy
Fed minutes show policymakers are divided over future cuts
Oil holds steady as Israel – Hezbollah agree a ceasefire deal

Stocks muted despite Q3 GDP upward revision, inflation up next

U.S. stocks are mixed after stronger than forecast data and ahead of the key core PCE inflation report.

US GDP was revised higher to 1.9% in Q3, up from 1.8%, boosted by solid consumer spending as inflation continued to cool. Core PCE in Q3 was also revised lower to 2.1% from 2%. Jobless claims eased to 213k, down from 215k, which added to the good news supporting the view that the US economy was in a good place.

The data comes after the FOMC minutes from the November meeting were released yesterday. They showed that policymakers were divided over future rate cuts but favored a gradual pace to cutting interest rates.

The market is pricing in a 69% probability of a 25 basis point cut in December, after which the Fed is expected to cut interest rates once per quarter across 2025.

Attention is now turning to core PCE data, the Fed’s preferred inflation gauge, which is expected to rise to 2.8% from 2.7% Yo. On a monthly basis, core PCE is expected to rise 0.3%, raising some uncertainty over the outlook for rate cuts from the Fed.

While core PCE is usually considered a big market mover, things could be different today, given tomorrow's Thanksgiving break.

Corporate news

HP is set to open 9% lower after the information technology company gave disappointing guidance for 2025.

Dell Technologies tumbled 12% after the computer manufacturer missed revenue estimates.

Crowd strike issued a weaker-than-expected earnings forecast, disappointing investors who have been looking for signs that it has recovered from an update that crashed computers across the globe.

Workday is set to fall 10% after the cloud-based business application company’s guidance disappointed.

S&P 500 forecast – technical analysis.

The S&P500 has recovered from the 5830 low, rising above 5880 to 6028 a new record high, although momentum shows signs of waning. Buyers will look to rise above 6028 to fresh ATHs towards 6050. Support can be seen at 5880, the October high. It would take a break below 5830 to create a lower low.

FX markets – USD falls, EUR/USD rebounds

The USD is falling, tracking treasury yields lower, as the markets weigh Trump's tariff vow and traders balance their portfolios before the end of the month.

EUR/USD is rising towards 1.0550 amid a weaker U.S. dollar and despite deteriorating consumer confidence in Germany. German GfK consumer confidence plunged to a nine-month low at -23.2 in December, down from -18.4 and well below forecasts of -18.8. The deterioration in consumer confidence comes amid rising concerns over job security amid signs of a downturn in the eurozone’s largest economy.

USD/JPY has fallen sharply and is on track to book its third straight day of losses. While the yen has enjoyed some safe-haven flows following Trump's tariff announcement, it is also benefiting from growing expectations that the Bank of Japan will hike interest rates in the December meeting.

Oil holds steady as Israel – Hezbollah ceasefire is agreed

Oil prices are holding steady for a second straight day as the markets weigh up a ceasefire deal between Israel and Hezbollah and look ahead to the OPEC+ meeting this weekend.

A ceasefire between Israel and Iran-backed Hezbollah came into effect today as both sides accepted an agreement. The focus now will be on whether the agreement will be observed. Still, there is a sense of cautious optimism, which has resulted in the geopolitical risk premium easing slightly at the start of the week, reflected by the slip in oil prices on Monday.

Attention is now turning to the OPEC+ group, which also meets on Sunday and is expected to further delay the unwinding of its output cuts.

Crude oil stockpiles fell by 5.49 million barrels in the week ending November 22nd, exceeding analysts' forecasts of a drop of 600k. However, fuel inventories rose.

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