News

Fundamental
Overview

The S&P 500 remains supported
by the current US government shutdown as it keeps bearish risks away. In fact,
the delay of key US data like the NFP is keeping monetary policy expectations
steady and doesn’t give the Fed members much to work with.

As long as the Fed
continues to cut interest rates and keeps a dovish reaction function, the stock
market will remain skewed to the upside on steady growth expectations. What
could trigger a bigger pullback is a hawkish repricing in the current interest
rates expectations. That will require strong labour market data though, or clear
inflation re-acceleration.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500 is consolidating above the
previous all-time high around the 6,756 level which is acting as support. The
buyers will likely continue to step in around the support with a defined risk
below it to keep targeting new highs. The sellers, on the other hand, will want
to see the price breaking lower to target a pullback into the 6,611 level next.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a minor upward trendline defining
the bullish momentum which is also adding confluence to the 6,756 support. Again,
this is where we can expect the buyers stepping in to keep targeting new highs,
while the sellers will look for a break lower to target a drop into the 6,680
level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as the buyers will continue to lean on the
support, while the sellers will wait for a break lower to pile in for new lows.
The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the FOMC meeting minutes. Tomorrow, we have Fed Chair Powell
speaking and the US Jobless Claims report (if the shutdown is lifted). On
Friday, we conclude the week with the University of Michigan Consumer Sentiment
report.

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

Fundamental
Overview

The S&P 500 remains supported
by the current US government shutdown as it keeps bearish risks away. In fact,
the delay of key US data like the NFP is keeping monetary policy expectations
steady and doesn’t give the Fed members much to work with.

As long as the Fed
continues to cut interest rates and keeps a dovish reaction function, the stock
market will remain skewed to the upside on steady growth expectations. What
could trigger a bigger pullback is a hawkish repricing in the current interest
rates expectations. That will require strong labour market data though, or clear
inflation re-acceleration.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500 is consolidating above the
previous all-time high around the 6,756 level which is acting as support. The
buyers will likely continue to step in around the support with a defined risk
below it to keep targeting new highs. The sellers, on the other hand, will want
to see the price breaking lower to target a pullback into the 6,611 level next.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a minor upward trendline defining
the bullish momentum which is also adding confluence to the 6,756 support. Again,
this is where we can expect the buyers stepping in to keep targeting new highs,
while the sellers will look for a break lower to target a drop into the 6,680
level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as the buyers will continue to lean on the
support, while the sellers will wait for a break lower to pile in for new lows.
The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the FOMC meeting minutes. Tomorrow, we have Fed Chair Powell
speaking and the US Jobless Claims report (if the shutdown is lifted). On
Friday, we conclude the week with the University of Michigan Consumer Sentiment
report.

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

• Economy still on gradual path of growth
• Base case is there is gradual recovery in economy

Muller made similar comments in the past weeks. Again, the majority of the ECB members are just waiting to see how the economy evolves in the next few months but won’t overreact to small or short-term deviations to their 2% target, unless we get some clear shock.

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

• Economy still on gradual path of growth
• Base case is there is gradual recovery in economy

Muller made similar comments in the past weeks. Again, the majority of the ECB members are just waiting to see how the economy evolves in the next few months but won’t overreact to small or short-term deviations to their 2% target, unless we get some clear shock.

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

While the main political headache in the US is the inability — or rather, unwillingness — of Democrats and Republicans to reach a budget agreement, which has led to another government shutdown, Europe’s biggest concern remains France, where another prime minister has resigned, less than a month after taking office.

Markets reacted to the blow accordingly, with the euro falling against the dollar, along with France’s CAC 40 index and the Euro Stoxx 50, while French and German government bond yields rose. On the other hand, gold (XAUUSD), the traditional safe haven, experienced another upward surge, approaching the $4,000 mark.

Why don’t French prime ministers last in office?

To understand the magnitude of the problem, the country has just lost its fifth prime minister in just two years. So while Monday’s resignation was not exactly surprising, it reinforced the sense of prolonged political instability, which does nothing to reassure investors, especially those holding French sovereign debt.

At the heart of the problem lies the government’s inability to address France’s fiscal imbalance. The budget deficit currently stands at around 6% of GDP, double the 3% limit set by the EU. Public debt has risen to approximately 114% of GDP, well above the threshold recommended by the EU.

It’s not that there are no ideas for solving the problem. The solution is straightforward: raise taxes and cut spending. That is precisely what François Bayrou’s initiative proposed, aiming to drastically reduce the deficit from 5.8% in 2024 to less than 4.6%. However, it ended up facing a vote of no confidence.

In addition to the obstacles posed by opposition parties, all reform efforts to cut budgetary spending face fierce resistance from public opinion. The fundamental question, then, is how to cut spending or raise taxes enough to balance the budget without triggering another social crisis that could hit the country’s growth.

Is the euro in danger?

In theory, if the stalemate continues, not only could rating agencies further downgrade France’s credit rating, which would further increase financing costs, but the crisis could end up spreading to the bloc’s financial sector, causing capital outflows, higher inflation, a weaker euro, judging by the EURUSD chart, and a fall across the EU markets.

However, much will also depend on what happens with the US dollar, and the outlook for now is not very promising. In addition to the government shutdown and expectations that the Fed will continue to lower interest rates, US debt and persistent trade tensions could continue to weigh on the dollar in the long term.

This article was written by IL Contributors at investinglive.com.

While the main political headache in the US is the inability — or rather, unwillingness — of Democrats and Republicans to reach a budget agreement, which has led to another government shutdown, Europe’s biggest concern remains France, where another prime minister has resigned, less than a month after taking office.

Markets reacted to the blow accordingly, with the euro falling against the dollar, along with France’s CAC 40 index and the Euro Stoxx 50, while French and German government bond yields rose. On the other hand, gold (XAUUSD), the traditional safe haven, experienced another upward surge, approaching the $4,000 mark.

Why don’t French prime ministers last in office?

To understand the magnitude of the problem, the country has just lost its fifth prime minister in just two years. So while Monday’s resignation was not exactly surprising, it reinforced the sense of prolonged political instability, which does nothing to reassure investors, especially those holding French sovereign debt.

At the heart of the problem lies the government’s inability to address France’s fiscal imbalance. The budget deficit currently stands at around 6% of GDP, double the 3% limit set by the EU. Public debt has risen to approximately 114% of GDP, well above the threshold recommended by the EU.

It’s not that there are no ideas for solving the problem. The solution is straightforward: raise taxes and cut spending. That is precisely what François Bayrou’s initiative proposed, aiming to drastically reduce the deficit from 5.8% in 2024 to less than 4.6%. However, it ended up facing a vote of no confidence.

In addition to the obstacles posed by opposition parties, all reform efforts to cut budgetary spending face fierce resistance from public opinion. The fundamental question, then, is how to cut spending or raise taxes enough to balance the budget without triggering another social crisis that could hit the country’s growth.

Is the euro in danger?

In theory, if the stalemate continues, not only could rating agencies further downgrade France’s credit rating, which would further increase financing costs, but the crisis could end up spreading to the bloc’s financial sector, causing capital outflows, higher inflation, a weaker euro, judging by the EURUSD chart, and a fall across the EU markets.

However, much will also depend on what happens with the US dollar, and the outlook for now is not very promising. In addition to the government shutdown and expectations that the Fed will continue to lower interest rates, US debt and persistent trade tensions could continue to weigh on the dollar in the long term.

This article was written by IL Contributors at investinglive.com.

AI adoption among both consumers and businesses is expected to ramp up quickly in India. Amazon-backed Anthropic wants to be involved.

It’s a triple whammy for the Japanese yen currency in trading this week. The first was the weekend news that Sanae Takaichi, a big fiscal dove, won the LDP leadership elections. That in itself already led to USD/JPY opening with a gap higher on Monday, which saw the daily close take out the 150.00 level.

Adding to the situation now is that Takaichi is having to deal with a coalition backlash with Komeito leader, Tetsuo Saito, openly questioning her suitability as the leader of the coalition. Both parties are unable to come to an agreement and that’s presenting some added uncertainty to Japan’s political climate.

And on the week itself now, we have that firm break above the July high for USD/JPY which opens up the floodgates for the next leg higher. That after the break of 150.00 and the hold above the 100-week moving average of 149.67, which follows from almost three months of consolidation action in the pair.

The move higher now is afforded some breathing room with the next key resistance region being closer to the 155.00 mark.

The jump higher in USD/JPY is also helping to underpin the dollar this week, as the greenback continues to find bids in European trading today as well.

This article was written by Justin Low at investinglive.com.

It’s a triple whammy for the Japanese yen currency in trading this week. The first was the weekend news that Sanae Takaichi, a big fiscal dove, won the LDP leadership elections. That in itself already led to USD/JPY opening with a gap higher on Monday, which saw the daily close take out the 150.00 level.

Adding to the situation now is that Takaichi is having to deal with a coalition backlash with Komeito leader, Tetsuo Saito, openly questioning her suitability as the leader of the coalition. Both parties are unable to come to an agreement and that’s presenting some added uncertainty to Japan’s political climate.

And on the week itself now, we have that firm break above the July high for USD/JPY which opens up the floodgates for the next leg higher. That after the break of 150.00 and the hold above the 100-week moving average of 149.67, which follows from almost three months of consolidation action in the pair.

The move higher now is afforded some breathing room with the next key resistance region being closer to the 155.00 mark.

The jump higher in USD/JPY is also helping to underpin the dollar this week, as the greenback continues to find bids in European trading today as well.

This article was written by Justin Low at investinglive.com.

If you give Trump an inch, he’ll be asking for a mile. And even if you don’t, it’ll happen anyway. That’s what the EU is dealing with right now as a report emerges that the latest trade demands from the US threatens to undo the framework agreement struck between the two in August.

As things stand, there is a 15% ceiling to tariffs on most goods from the EU but sources are saying that the US has resisted adding goods such as wine and spirits to the list of imports that are exempt from the tariffs. Adding to that, discussions to cut the 50% US tariffs on steel and aluminum are said to have made little progress.

And now, EU officials are starting to be concerned that the US is preparing more potential tariffs on other sectors like medical devices and technologies; while at the same time expanding the list of derivative steel and aluminum products covered by the 50% tariffs rate.

It looks like the trade drama will be starting up again. Most countries are hoping to buy time long enough to ride out the storm during these next four years. But as Trump remains at the center of it all, that is a long time to gamble as there’s no telling when the next thunder strike might be.

This article was written by Justin Low at investinglive.com.