US futures
Stocks rise after losses last week The US government shutdown could be nearing an end Attention would then return to Fed rate cut expectations Oil rises on hopes the shutdown will end Risk-on sentiment lifts stocks US stocks offset for a strong open following signs of progress in Washington to end the record-long government shutdown.
On Sunday, senators advanced the House-passed bill in a procedural vote, which will be amended to fund the government until January 30th. If passed in the Senate, it would require House approval and Trump's signature.
Reopening would not only boost sentiment but also open the way for data releases, which could provide more insight into the health of the US jobs market and, more broadly, the US economy ahead of next month's Federal Reserve interest rate decision.
Data last week showed that challenger job cuts jumped to 153,000 in October, the highest level for that month in two decades.
U.S. stocks ended last week with steep declines, with the NASDAQ booking its worst weekly loss in over seven months. The market fell amid concerns about the jobs market and lofty valuations, which hurt risk sentiment.
The market is currently pricing in around a 65% probability of a rate cut in December. However, the shutdown will likely have weighed on the economy with federal workers unpaid, and White House economic adviser Kevin Hassett warned that GDP could be negative if the government shutdown continues.
Corporate news Palantir, the tech stock, is rising by more than 3% after tumbling by more than 11% last week amid the sell-off in AI-focused names. The upbeat mood is helping investors put fears of overvaluation behind them.
American Airlines, United Airlines, and Delta Airlines are all rising around 2% premarket on hopes that the US government shutdown could end. Hundreds of flights have been cancelled due to disruptions and a shortage of air traffic control personnel.
Gold miners will be in focus as the precious metal has risen over 2.3% at the start of the week, as attention turns to the Fed and rate cut expectations.
S&P 500 forecast – technical analysis. The S&P 500 trades within a rising channel. The price ran into resistance at the record high of 6920 before rebounding lower to 6630. The price has recovered from the spike lower, pushing above resistance at 6765, the October 9 high, and is testing 6800 resistance. Buyers will look to rise towards 6920 and fresh record highs. Support is seen at 6670, the 50 SMA. It would take a fall below 6630 to create a lower low and open the door to 6500.
FX markets – USD falls, GBP/USD rises The U.S. dollar is edging lower after losses last week, as hope grows that the U.S. government could reopen soon. Attention will turn back to US data and Fed rate-cut expectations, which stand at 66% for a December cut.
EUR/USD is rising, adding to last week’s gains. The EUR is supported by the view that the ECB has finished its rate-cutting cycle. ECB speakers will be in focus this week, including ECB President Lagarde. On the data front, Eurozone sentiment deteriorated in November, falling to -7.4 from -5.4.
GBP/USD is rising amid a weaker USD and a risk-on market mood. Meanwhile, BoE Chief Economist Huw Pill also adopted a slightly more hawkish stance, saying the market should not read too much into the BoE’s shift in language in the November MPC statement. Attention will turn to UK unemployment data tomorrow, which is expected to rise to
Oil rises after two weeks of declines. Oil prices are rising after losses last week as investors assess the potential for an end to the US government shutdown and ongoing oversupply worries in the crude oil market.
A move to end the 40-day shutdown, which has furloughed over 75k federal workers and hit the travel industry, would be a positive for the oil demand outlook. Airlines canceled over 10,800 flights on Sunday, potentially affecting jet fuel demand.
Oil fell last week for a second straight week on fears of a supply glut. OPEC+ and its allies agreed to increase output again in December, but agreed to pause output increases in Q1.
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