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27.10.202209:30 Forex Analysis & Reviews: Growth in US stock market stopped. Important data looming

Exchange Rates 27.10.2022 analysis

S&P 500

Outlook on October 27th

Growth in the US stock market stopped.

Today is the day of important events.

The leading US stock indices edged lower on Wednesday: the Dow added 0%, and the S&P500 fell by 0.7%.

On Thursday morning, S&P 500 futures gained 0.5%.

The S&P 500 index is trading at 3,830 in the range between 3,780 and 3,880.

Moving up, the US stock market encountered resistance near the 50-day and 100-day moving averages, as expected.

The ECB will announce its interest rate decision today. The regulator is expected to hike rates by 0.75%. The Q3 GDP report will be published in the US. The figures are estimated to rise by 2.1%. Data on US unemployment will also be released today.

In the second quarter, GDP fell sharply to 5.3% versus 9%. The US stock market would surge should the data come in line with the forecast.

Alphabet (GOOG 94.82, -10.11, -9.6%) and Microsoft (MSFT 231.32, -19.34, -7.7%) posted significant losses, following the release of their earnings reports.

Among the Dow's constituents, Boeing (BA 133.79, -12.86, -8.8%) showed the worst performance. The company reported disappointing quarterly results and said its road to recovery would take more time than expected due to the challenging macro environment. Supply disruptions still affect both the commerce and defense industries.

Overall, advancing issues outnumbered declining ones on the NYSE and Nasdaq exchanges by a 4-to-3 ratio.

Strong quarterly results came from Harley-Davidson (HOG 41.80, +4.68, +12.6%) and Bristol-Meyers (BMY 74.45, +1.68, +2.3%). This provided support for the market along with expectations of a reduction in rate hikes by the Fed after a meeting in November as well as of a decrease in Treasury bond yields. The 10-year bond yield fell by ten basis points to 4.02%, while the yield on 2-year Treasury notes dropped by four basis points to 4.02%.

About half of the 11 S&P 500 sectors closed higher, with the energy sector leading the way (+1.4%) amid a rise in crude oil prices. WTI futures advanced by 3.4% to $87.86 per barrel.

Comcast (CMCSA), Anheuser-Busch InBev (BUD), Caterpillar (CAT), Merck (MRK), Northrop Grumman (NOC), Honeywell (HON), AutoNation (AN), McDonald's (MCD), Mastercard (MA), and Altria (MO) will deliver earnings reports on Thursday.

Energy: Brent gained 2% to trade at $95.3 per barrel.

Elon Musk acquired Twitter.

The US dollar index fell to 109.8 points. The euro increased above parity with the dollar (1.0080), boosted by expectations of a rate hike by the ECB.

Final thoughts: the US stock market is likely to go up in the case of upbeat GDP data in the US.

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Jozef Kovach,
Analytical expert of InstaSpot
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