S&P500
Investors expect the US stock market to extend gains.
US stocks ballooned on Thursday, scoring gains for the third day. The Dow and the NASDAQ closed up by 1% and the S&P500 added 0.8%.
Major stock markets in Asia closed with gains in the previous week. This morning, Japan's and China's main indices increased by 1.4% and 1.3% respectively.
COVID-19 worldwide: +466K new infections were reported yesterday. The global infection rate dropped by 40% from the peaks of the third wave. The US and the UK reported around +100K and +40K new cases respectively.
S&P500: 4,400; 4,360–4,440 range. The main US stock index rose by 0.8% yesterday. At the same time, its growth was 2 times higher during the day. Bearish pressure on the index increased when the price approached the 50-day MA. Due to the previous plunge, the important 50-day MA is now located above the index, having turned into strong resistance. Although the market is expected to be bearish, the price may well continue rising or stuck in the range.
US debt limit. Yesterday, the Senate approved legislation to raise the debt ceiling by $480 billion through December 3. Until then, the Senate must nail down a compromise on budget spending. The issue of raising the national debt limit seems to have been almost resolved - at least until the beginning of December.
The US Department of Energy said that the government does not plan to use state oil reserves to boost supply in the market. Oil rose by 1.4% this morning and Brent was trading above $83 (83.10).
The gas crisis in Europe is still ongoing. On Thursday, the price plunged by 17% to $1,100 after reaching $1,750 per barrel. Nevertheless, even $1,000 per 1,000 cubic meters can harm the EU economy and, by boosting inflation, cause huge problems for the ECB and the euro. The issue of abnormally high gas prices will be discussed in a high-level meeting next week.
Yesterday, the US published its weekly jobless claims. Initial claims dropped to 326K and continuing claims fell by 100K to 2.7 million. Today, the US Labor Department will present its closely-watched monthly report. Nonfarm payrolls are estimated to increase by 400-450K in September. If so, this would be a solid argument in favor of tapering for the Fed.
USDX: 94.30, 94.00–94.60 range. Despite a decrease in tensions around the US government debt, the greenback remains strong. The US dollar index is trading near the upper boundary of the range, showing its readiness to extend growth - probably during the next Fed meeting.
USD/CAD: 1.2550; 1.2500–1.2600 range. The loonie is strengthening amid high oil prices. The pair is expected to drop to 1.2500 or below this mark.
The US market is ready to extend gains and expects the September employment report.
