Nasdaq 100 forecast: Key US employment data in focus

Global stocks rallied sharply last week, supported by big stimulus announcements from China while confidence grew about another outsized rate cut from the Fed this year. This week, US data will take centre stage, with key employment indicators in focus. We will also have some important data from China first thing in the week, before it goes on a week-long holiday. But despite the big rally in Chinese markets and the Dow and DAX hitting fresh records, the Nasdaq and S&P both fell into the close on Friday as technology stocks fell. While the Nasdaq 100 forecast is still bullish, Friday’s price action suggests we could be in for a consolidative period or a small pullback in early parts of the week – especially given the further escalation in the Middle East conflict.

Before we look ahead to this week’s top events, let’s take a look at the Nasdaq chart.

Nasdaq 100 forecast: technical levels to watch

Source: TradingView.com

The higher highs and higher lows, and not to mention the record-setting indices like the Dow Jones and S&P 500, all point to a bullish technical Nasdaq 100 forecast. However, the Nasdaq fell into the close on Friday, suggesting that the bullish trend may have weakened ahead of this week’s key events and upcoming earnings season. So, a bit of a pullback in early this week should not come as major surprise. Key support comes in around the 21-day exponential moving average, which sits inside a key pivotal range between 19285 to 19635. This area needs to hold to maintain the bullish trend. If it breaks, then expect to see a big follow-up drop, perhaps towards the 200-day average. Conversely, if last week’s high of 20315 breaks, then this could pave the way for a run towards the July record high of 20759.

Chinese PMIs could reinforce growth worries (Monday)

China is stepping up efforts to combat its economic slowdown, with a significant fiscal spending push aimed at hitting its growth targets. Reports suggest the Chinese government may inject up to 1 trillion yuan into major state-owned banks to boost lending capacity. This follows the central bank’s largest stimulus package announced last week since the pandemic, sending the local markets soaring. If the upcoming data points to further deterioration in China’s economic health, it could reignite concerns over short-term demand, potentially impacting market sentiment in a negative, especially as China will be out for the rest of the week.

JOLTS Job Openings could steal the show (Tuesday)

Among this week’s key US economic data, the JOLTS report on Tuesday could be the highlight. With the Federal Reserve’s focus shifting from inflation to employment, this report takes on extra importance. The Fed’s aggressive rate cut in September has already shown their concern over a weakening job market. If the trend continues, it could increase the probability of another 50-basis-point rate cut in November, applying additional downward pressure on the dollar and support for equity markets. Pay close attention to employment metrics in the ISM services and manufacturing PMIs for further clues. But with much of the rate expectations in the price, you do have to wonder how much of a further lift these figures will give to the market.

US Non-Farm Payrolls should impact Fed’s November decision (Friday)

This will be the highlight of the week, make no mistake about it. In August 2024, the US economy added 142,000 jobs, falling short of the 160,000 forecast. Revisions to previous months showed July's figures lowered by 25,000 and June’s by 61,000. However, the unemployment rate dropped to 4.2%, while average weekly earnings exceeded expectations, growing by 0.4%. Concerns about the labour market prompted the Fed to cut rates by 50 basis points in September. If job growth continues to cool, it increases the likelihood of another 50-basis-point cut in November, further fuelling the reflation trade. However, a surprisingly strong jobs report could shift market expectations sharply.

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.