Market Trader Report V2#35
MyntBit's Market Trader Report brings potential setups for futures & stocks with a time horizon from days to weeks depending on price action. The following research is based on Fundamentals, Technical & Options Analysis.
What is included in this week's edition?
WEEKLY REVIEW: An overview of current market standing, fundamental matters with implications upon the market, and general sentiment regarding the major US indices.
LOOKING AHEAD: Key takeaways to consider as we look forward to the upcoming trading week.
FUTURES MARKETS: ES, NQ, RTY, VIX - A technical review of the major indices, futures, and commodities that represent the overall health of the market.
Market Trader by MyntBit
Weekly Market Review
The focal point of the week was the FOMC November policy meeting, during which policymakers' decision to keep the federal funds rate steady in the range of 5.25% to 5.50% aligned with market expectations. Following the meeting, Fed Chair Powell, in the post-meeting press conference, noted that the full effects of a notably tighter monetary policy are yet to be experienced. He emphasized that the FOMC requires additional evidence of sustainable inflation reduction. Powell also highlighted strong economic growth indicated by recent metrics, including the unexpectedly high third-quarter gross domestic product (GDP). However, he observed that the housing sector's activity has plateaued, and labor market supply and demand conditions are moving towards better equilibrium.
In the wake of the meeting, market expectations remained that policymakers would maintain the federal funds rate in December. Investors were closely monitoring labor market data throughout the week, and the Friday job reports showed signs of a weakening trend in hiring. Non-farm payrolls for October amounted to 150K, a drop from September's revised figure of 297K and below consensus expectations, marking the smallest increase since June. The unemployment rate for October increased to 3.9%, up from September's 3.8%, while labor force participation for the same period declined to 62.7%. In addition, average hourly earnings for October increased by 0.2% on a month-over-month (MOM) basis, slowing from the prior month's 0.3% growth, and the average workweek slightly decreased to 34.3 hours. The Job Openings and Labor Turnover Survey (JOLTS) job openings for September increased to 9,553K on a MOM basis, and the October ADP employment change report also showed a MOM increase of 113K.
Collectively, this data was interpreted as a signal of an economic slowdown, reinforcing the view that the Fed would not raise interest rates further. Consequently, stocks rose, and Treasury yields fell following the Friday jobs reports. In addition to labor market data, other significant data releases provided insights into consumer sentiment, the housing market, and services and manufacturing activity. Consumer confidence for October decreased for the third consecutive month, registering at 102.6. In the housing sector, construction spending for September increased by 0.4% on a MOM basis, though at a slower pace compared to the previous month. The Institute for Supply Management's October purchasing managers' index (PMI) data showed a decline in manufacturing PMI to 46.7 on a MOM basis, marking the twelfth consecutive month of contraction. The services PMI also fell on a MOM basis to 51.8.
As of Friday morning, major stock indices were poised for weekly gains, with the S&P 500 Index heading for its best week in 2023, up by 5.9% as of 12:00 p.m. ET. The Nasdaq Composite was on track to rise by 6.4%, while the Dow was set to advance by 5.1% for the week.
Weekly Performance Heatmap
Overall Stock Market Heatmap & Sector Performance
Looking Ahead to the Upcoming Week
The main event in an otherwise quiet data week will be the release of preliminary data on November consumer sentiment and inflation expectations from the University of Michigan on Friday. Additionally, we can expect updates on September's trade balance, consumer credit, and wholesale trade, as well as October's Treasury budget statement. In the realm of central banking, Fed Chair Jerome Powell is scheduled to deliver a speech at the International Monetary Fund's annual research conference, and the Fed will unveil the results of the November Senior Loan Officer Opinion Survey. On the auction front, the Treasury Department is set to auction $112 billion worth of three-, 10-, and 30-year securities.
In the Asian markets, attention will be focused on major Chinese economic indicators for October, including the Consumer Price Index (CPI), Producer Price Index (PPI), trade balance, and money supply growth. From Japan, we'll be looking for updates on October's PPI, as well as September's leading index, labor cash earnings, and trade balance. Elsewhere in the region, the Royal Bank of Australia is convening for a policy meeting.
In Europe, the spotlight will be on the finalization of October's Purchasing Managers' Index (PMI) data for the services sector, and we'll also receive reports on September's Producer Price Index (PPI) and retail sales. From the United Kingdom, keep an eye out for the preliminary reading of third-quarter GDP, along with data on September's industrial production and trade balance.
Earnings Calendar
