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S&P 500 (SPX) Week Ahead: Focus on Fed’s Rate Decision Amid Earnings Flood
Arslan Butt•Saturday, March 16, 2024•2 min read
The S&P 500 (SPX) may be set for a recalibration after a recent bullish run, underscored by a flurry of economic data and anticipatory investor sentiment. Here’s a more nuanced forecast for the index:
Friday’s uptick in the Dollar Index and a tentative 0.65% decline in the S&P 500 (SPX) to 5117.10 have investors bracing for the index’s next move. With building permits projected at 1.50 million, any deviation could influence market dynamics, potentially affecting the S&P 500’s safe-haven demand.
The Federal Reserve’s Policy in Focus
Expectations for the Fed’s interest rate decision are steady, with a hold at 5.50% predicted. The subsequent FOMC economic projections and Chairman Powell’s commentary will be key for investors forecasting the S&P 500’s (SPX) price.
Employment and Manufacturing as Economic Barometers
Unemployment claims are expected at 214K, with the Philly Fed Manufacturing Index anticipated at -1.8%. The S&P 500 (SPX) price forecast will hinge on these indicators, which reflect economic vigour and manufacturing health.
Earning Reports Ahead
The upcoming week promises significant market movements with a series of crucial earnings reports from diverse sectors slated for release.
On Wednesday, March 20, 2024, the market will scrutinize earnings from PDD Holdings DRC with expectations set at $11.28 earnings per share (EPS) on $79.49B in revenue, Micron Technology is expected to report an EPS of -$0.2586 on $5.33B revenue, and General Mills anticipated to post an EPS of $1.05 on $4.96B revenue.
The following day, major names like Accenture, with an EPS forecast of $2.66 on $15.84B revenue; Nike, expected to unveil an EPS of $0.7553 on $12.27B revenue; and FedEx, with projections at $3.51 EPS on $21.97B revenue, will take the stage.
Notably, Lululemon Athletica and Darden Restaurants are also among those reporting, with EPS predictions at $5 and $2.64 respectively, alongside FactSet Research, anticipated to report $3.88 EPS.
S&P500 (SPX) Price Forecast: Technical Outlook
The S&P 500 retreated modestly, closing down 0.65% at 5117.10. The index failed to uphold its position above the pivotal 5130.00 level, which serves as its immediate pivot point. This decline suggests potential vulnerability to further losses.
Resistance and Support Levels
- The market faces immediate resistance at 5185.18, with subsequent hurdles at 5231.37 and 5279.23 that bulls need to overcome to regain control.
- On the descent, the index finds its initial support at 5089.72. Further down, the benchmarks are set at 5058.36 and 5006.75, which may provide stopping points for a deeper retreat.
Technical Indicators
- The Relative Strength Index (RSI) hovers at a neutral 50, hinting at a potential for either direction in the near term.
- The 50-day Exponential Moving Average (EMA) lies just below the current price at 5072.28, suggesting a thin cushion for the index.
With the S&P 500 breaching its support channel at 5130.00, the immediate trend leans bearish. A recovery above this level could signal bullish momentum resurfacing, while failure to do so may indicate an extended pullback.
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ABOUT THE AUTHOR
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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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