The S&P 500 broad market index saw a 0.3%
increase, reaching 4790 points this week, a notable recovery considering the
1.3% decline to 4714 points on Wednesday. Investor sentiment initially waned as
bets on a Federal Reserve (Fed) interest rate cut in March dropped to 52.8%
from 73.0%, and U.S. 10-year Treasuries yields surged to 4.15%. Hawkish
comments from Fed officials, particularly from Atlanta Federal Reserve
President Raphael Bostic, contributed to this shift in sentiment. Bostic
mentioned an expectation of rate cuts starting in the third quarter of the
year, reflecting confidence in economic strength.
Macroeconomic data supported this optimistic
outlook, indicating potential inflation recovery and a robust U.S. economy.
U.S. retail sales for December exceeded expectations, rising by 0.6% MoM. The
Atlanta Fed GDPNow model suggested a Q4 2023 GDP growth of 2.4%, up from the
previous estimate of 2.2%. Additionally, Initial Jobless Claims fell to
187,000, reinforcing the perception of a strong labor market. Strong corporate
earnings, the extension of government funding into early March, and positive
news from companies like Apple and Taiwan Semiconductor Manufacturing (TSMC)
contributed to a rebound in stocks.
Despite Nasdaq 100 outpacing the S&P 500
with a 1.7% rise, the broader market index is on the verge of setting new
all-time highs, hovering around the 4760-4780 points support. The final upside
targets are anticipated at 4850-4950 points, with the achievement potentially
occurring during the current or next week.
Oil prices are attempting to surpass $80.00
per barrel for Brent crude, propelled by ongoing tensions in the Middle East,
moving away from the $74.00-76.00 per barrel support. This suggests that
further efforts are needed for continued upward momentum.
Gold prices, having previously reached
mid-term upside targets at $2000-2100 per troy ounce, are testing the support
at $2010-2030 per ounce. The potential technical weakness period could lead
gold prices to $1920 if the $2010 per ounce support is breached.
The Greenback strengthened by 0.6% this week,
potentially indicating an upcoming downside correction. Monitoring potential
reversal signals is advisable, as the Dollar may strengthen unexpectedly,
despite having reached its primary correction targets at 1.11500-1.12500
against the Euro.