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For retailers, the findings add a note of caution to the most crucial sales period of the year.

Fundamental
Overview

The S&P 500 continues
to recover the losses experienced on Friday following Trump’s threat of increasing
tariffs by 100% on China in response to the recent Chinese imposition of export
controls on rare earth minerals.

Over the weekend, we got more
soothing words from Trump and other US officials that eventually led to a big
upside gap at the open. The gap was then filled following a bit more aggressive
comments from US Treasury Secretary Bessent and some Chinese countermeasures on
port fees.

Yesterday, US Trade
Representative Greer repeated mostly the same stuff that we’ve already heard
over the weekend but added two important comments as he mentioned that they are
watching the stock and bond markets and that they want to make sure the market
responds to appropriate info.

This sounds like they don’t
want the market to think this is going to be another April. They want the
market to keep expecting a de-escalation, which has indeed been the case since
the weekend. Even Trump’s late post threatening a termination of cooking oil
business with China sounded like a very weak move.

This suggests a limited
pain threshold by the US administration which shouldn’t be surprising given the
overstretched positioning in the stock markets. The Friday’s selloff was so
aggressive for this reason. So, if things go south between now and November 1,
then we could indeed have another April-like selloff. For now, the downside is
limited by the de-escalatory expectations.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500 pulled all the way back to
the major trendline around the 6,542 level and it’s now recovering into the key
6,757 level. This is where we can expect the sellers to step in with a defined
risk above the level to position for another drop into the trendline. The
buyers, on the other hand, will want to see the price breaking higher to
increase the bullish bets into a new all-time high.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more clearly the resistance zone around the
6,757 level and the recent choppy price action. There’s not much else we can
glean from this timeframe, so we need to zoom in to see some more details.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, if we
get a pullback from the resistance, we can expect the buyers to step in around
the most recent swing low at 6,666. In case the price breaks through that level
though, we can expect the drop to extend into the lows around the 6,600 level
as the sellers will likely pile in more aggressively. The red lines define the average daily range for today.

Upcoming
Catalysts

We don’t have key
data releases this week given the US government shutdown. The Fed speakers
continue to repeat the same old stuff. As of now, we know that only the US CPI
will be published despite the shutdown, which is scheduled for Friday October
24. At the moment, the markets are solely focused on US-China headlines.

This article was written by Giuseppe Dellamotta at investinglive.com.

Fundamental
Overview

The S&P 500 continues
to recover the losses experienced on Friday following Trump’s threat of increasing
tariffs by 100% on China in response to the recent Chinese imposition of export
controls on rare earth minerals.

Over the weekend, we got more
soothing words from Trump and other US officials that eventually led to a big
upside gap at the open. The gap was then filled following a bit more aggressive
comments from US Treasury Secretary Bessent and some Chinese countermeasures on
port fees.

Yesterday, US Trade
Representative Greer repeated mostly the same stuff that we’ve already heard
over the weekend but added two important comments as he mentioned that they are
watching the stock and bond markets and that they want to make sure the market
responds to appropriate info.

This sounds like they don’t
want the market to think this is going to be another April. They want the
market to keep expecting a de-escalation, which has indeed been the case since
the weekend. Even Trump’s late post threatening a termination of cooking oil
business with China sounded like a very weak move.

This suggests a limited
pain threshold by the US administration which shouldn’t be surprising given the
overstretched positioning in the stock markets. The Friday’s selloff was so
aggressive for this reason. So, if things go south between now and November 1,
then we could indeed have another April-like selloff. For now, the downside is
limited by the de-escalatory expectations.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500 pulled all the way back to
the major trendline around the 6,542 level and it’s now recovering into the key
6,757 level. This is where we can expect the sellers to step in with a defined
risk above the level to position for another drop into the trendline. The
buyers, on the other hand, will want to see the price breaking higher to
increase the bullish bets into a new all-time high.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more clearly the resistance zone around the
6,757 level and the recent choppy price action. There’s not much else we can
glean from this timeframe, so we need to zoom in to see some more details.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, if we
get a pullback from the resistance, we can expect the buyers to step in around
the most recent swing low at 6,666. In case the price breaks through that level
though, we can expect the drop to extend into the lows around the 6,600 level
as the sellers will likely pile in more aggressively. The red lines define the average daily range for today.

Upcoming
Catalysts

We don’t have key
data releases this week given the US government shutdown. The Fed speakers
continue to repeat the same old stuff. As of now, we know that only the US CPI
will be published despite the shutdown, which is scheduled for Friday October
24. At the moment, the markets are solely focused on US-China headlines.

This article was written by Giuseppe Dellamotta at investinglive.com.

The China-based autonomous driving firms Pony AI and WeRide have both filed with regulators in China to list their shares in Hong Kong.

Germany 30-y Bond Auction: 3.17% vs previous 3.25%

Pound Sterling (GBP) is likely to trade in a range between 1.3290 and 1.3365. In the longer run, downward momentum has slowed somewhat, but there is still a chance for GBP to decline to 1.3200, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

ECB’s Dolenc is Slovenia’s acting central bank governor. His policy
stance is neutral as he previously stated that monetary policy is in a good place and the next move could be
either a cut or a hike.

This article was written by Giuseppe Dellamotta at investinglive.com.

ECB’s Dolenc is Slovenia’s acting central bank governor. His policy
stance is neutral as he previously stated that monetary policy is in a good place and the next move could be
either a cut or a hike.

This article was written by Giuseppe Dellamotta at investinglive.com.

Recent rise in US Dollar (USD) was stopped in its track. DXY last at 98.81 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Euro (EUR) could rise, but any advance is likely part of a higher range of 1.1575/1.1635. In the longer run, the likelihood of EUR reaching 1.1490 during this phase of weakness is decreasing, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.