S&P500
Outlook for September 7
The US market declined after a long weekend.
On Tuesday, the key US stock indexes were down: the Dow Jones lost 0.55%, the S&P500 fell by
0.4%.
The S&P500 is trading at 3,908, the range is 3,860 - 3,960.
On Tuesday, the market declined slightly and hit last week's lows in the S&P500. Therefore, it seems that everyone who wanted to sell their stocks had managed to do it.
Technically, the S&P500 index shows a downward trend. At the same time, the market is limited by strong resistance as there are both the 50-day and 100-day averages (see the chart). To start growing, the market has to break through at least the 50-day average and close the day higher.
Asian stock indices fell to a 2-year low this morning after a weak Chinese trade report.
The dollar rose to new highs, 110.48 according to the index, following the yen's decline (144 yen per dollar). Moreover, it was expected that the Fed would raise its key rate by 0.75%.
On Tuesday, the US ISM Services PMI was 56.9%, above analysts' forecasts.
European indices are down 1% due to the energy crisis:
Energy crisis in the EU. Russian officials made it clear that Russian gas supplies to Europe may not resume until Western sanctions are lifted. Earlier, Gazprom blamed the shutdown of natural gas flow to Germany via Nord Stream 1 pipeline on technical problems .
On Wednesday, the US 10-year Treasury yield rose to 3.365%.
Traders of the yen should await the Bank of Japan's intervention. Some banks appealed to their clients to close yen loans urgently. Japanese authorities plan to intervene to support the yen, which could lead to its strengthening.
The euro is awaiting the ECB rate hike at 0.9900. Experts expect the rate to be raised by 0.5%. However, the 0.75% rate hike is possible.
Energy: Oil prices fell by 1.7% yesterday, Brent crude oil is trading at $91.60. Moreover, oil prices went down on expectations of falling demand due to the global economic slowdown.
UK. The new cabinet is preparing a big bailout package for energy consumers amid the energy crisis.
Washington said that the US was actively cooperating with Europe to make up for gas shortages after gas supplies from Russia were halted. The US plans to replenish Europe's gas reserves by the winter of 2022-23.
Saudi Aramco, the largest oil exporter, lowered oil prices by $2.7 for Asian buyers for October.
Conclusion. The US market is at levels favorable for buying. However, it is advisable to await a signal for a reversal. There has been no such signal so far.
