S&P 500, DAX & FTSE 100 On Soft Footing

Talking Points:

  • S&P 500 remains in limbo; highlight event of the week will be NFPs
  • DAX continues to coil, in danger of trading lower soon; Employment, CPI data
  • FTSE 100 light week on the economic calendar, to follow risk trends; keep an eye on 7300
  • Fundamental Forecast for equity indices: Bearish

    S&P 500

    The big event to end last week was Fed Chairwoman Janet Yellen speaking in Jackson Hole, and in terms of giving rise to market volatility we saw a modest uptick. Next week brings a fair amount of ‘high’ impact data, with Advance Goods Trade Balance on Monday, Consumer Confidence on Tuesday, 2Q GDP on Wednesday, Core PCE on Thursday, and then the most highly anticipated release of the week comes on Friday with the August jobs report, along with a likely overshadowed ISM Manufacturing report. Market consensus is for the U.S. economy to have added 180k jobs during the month, edging down from 209k in July. For release times and other data, see the economic calendar.

    Turning to the charts, the S&P 500, as discussed on Friday, remains in a state of limbo as it works its way lower. So far, the 3-down, 2-up sequence suggests buyers are still around on weakness and that at some point the market could gain traction. The key level to watch on the top side is 2454, its influence is growing and remains problematic for the market in gaining upside momentum. A break lower could see the S&P drop towards 2405, but as long as that holds and we see a quick rebound then the price sequence could take on the shape of maturing bull-flag. It would take a sharp break and failure to rebound before our outlook would become outright bearish.

    S&P 500: Daily

    S&P 500, DAX & FTSE 100 On Soft Footing

     

    DAX

    ECB President Mario Draghi spoke late on Friday and gave a further boost to the euro after the Fed’s Janet Yellen propelled it higher earlier in the day. More euro strength could come to weigh on the DAX as the week begins. Looking to data releases, on Wednesday we have German CPI followed by German Employment figures and Eurozone CPI on Thursday, and to conclude the week the U.S. jobs report on Friday.

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