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S&P500 Forecast :SPX rebounds after NFP miss, Amazon soars

Article By: ,  Senior Market Analyst
November 1, 2024 2:44 PM

US futures

Dow future 1.11% at 42230

S&P futures 0.81% at 5769

Nasdaq futures 1.2% at 20118

In Europe

FTSE 0.8% at 8172

Dax 0.94% at 19233

  • Stocks rebound following yesterday’s losses
  • NFP sees 12k jobs added in October
  • Amazon soars after earnings, Apple falls
  • Oil rises on Middle East tensions

US core PCE is unchanged, Meta & Microsoft fall

U.S. stocks are rising, recovering after yesterday's steep sell-off as investors digest the very weak US non-farm payrolls and as treasury yields to fall.

The October non-farm payroll report saw the headline number tumble to just 12k jobs added, well below the 113k estimated and down considerably from the September 223K, which had been downwardly revised from 254K.

The unemployment rate came in at 4.1%, in line with forecasts and the same as last month, while wage data also remained at 4% year on year.

The soft jobs data could be explained by the effects of hurricanes in Florida and North Carolina and strikes in the aerospace manufacturing industry. As a result, the Fed will probably ignore these numbers and stay on course.

The data comes ahead of next week's Federal Reserve interest rate decision, where the market is pricing in a 100% possibility of a 25 basis point rate cut.

The US 10-year treasury yield has eased to 4.23%, down from 4.31% just ahead of the nonfarm payroll report.

Meanwhile, attention is also firmly on the US election, where the polls are still showing to close to call. Meanwhile, the prediction market points to a Trump win.

Corporate news

Apple is falling despite the iPhone maker posting Q4 results that beat Wall Street's expectations for revenue and EPS. However, net income slumped after Apple paid a one-time charge as part of a tax decision in Europe. iPhone sales rose by 6%; however, there was some disappointment surrounding the growth outlook.

Amazon shares jumped after the tech giant reported stronger-than-expected earnings and revenue. Both the cloud and advertising units showed strong growth. Sales grew 19% in the quarter compared to 12% in the same quarter a year ago.

Exxon rose 1.8% after beating Q3 earnings expectations, raising its Q4 dividend, and returning $9.8 billion to shareholders.

Chevron is also rising after the oil major posted stronger than forecast Q3 earnings and revenue and returned over $7 billion to shareholders.

Boeing is also rising after the union representing the 33k striking workers endorsed a new pay offer from the aircraft manufacturer which includes a 38% increase in wages over the next four years.

S&P 500 forecast – technical analysis.

The S&P 500 is rising, rebounding from 5700 support and the 50 SMA as it heads back up towards 5775, the September high.  A rise above 5775 is needed to extend gains towards 5882  and fresh all-time highs. On the downside, a break below 5700 opens the door to 5670, the July high, and 5600, the 100 SMA.

FX markets – USD falls, EUR/USD rises

The USD is falling for a third straight day following the weaker-than-expected NFP report and tracking lower treasury yields. The USD is set to fall across the week in jittery trade ahead of next week’s election.

EUR/USD is falling but is still on track to rise throughout the week after stronger-than-expected inflation and growth data. The market still expects the ECB to cut rates in December.

GBP/USD is rising after two days of losses and is set to end the week flat despite the softer USD. Investors continue to digest this week’s Budget, which is expected to be inflationary yet has failed to boost the GBP, suggesting that the market isn’t convinced by the growth prospects of the economy following the Budget.

Oil rises on escalating Middle East tensions

Oil prices are rising over 2% on Friday on reports of rising tensions in the Middle East. Iran is reportedly preparing a retaliatory strike on Israel in the coming days and following updated data from China, the world's largest oil importer.

Despite the rise in oil prices, the commodity is still on track to lose across the week. Oil prices are also being supported by expectations that OPEC+ could delay its planned increase in oil production by a month or more owing to concerns about soft oil demand and rising supply. A decision is expected as soon as next week.

Looking ahead to the US elections candidate Kamala Harris and Donald Trump have different views on policy towards oil production.

 

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