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30.08.2023 03:19 PM
US premarket on August 30: US stock market continues to rise

US stock index futures are trading in the green. S&P 500 futures have risen by 0.1%, while the high-tech NASDAQ has gained only 0.2%. European stock market and bond market have declined after news indicating that inflation in Eurozone member countries is still far from its target level. Germany's 10-year bond yield surged by seven basis points to 2.58%, driven by data showing price increases in four out of six German regions in August. Inflation in Spain has also accelerated.

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Today's inflation data from Germany and Spain will complicate the actions of European policymakers ahead of the September rate decision. Current futures on interest rates suggest roughly equal chances of a 0.25% rate increase by the European Central Bank to 4% in September. Bleak prospects were further compounded by data revealing that consumer confidence in the Eurozone remained negative.

Turning to the US market, the S&P 500 index jumped on Tuesday as unexpectedly low US consumer confidence figures raised hopes that the US Federal Reserve might be approaching the end of its monetary tightening cycle. Treasury bond yields increased, while the US dollar's value remained stable.

Today, investors will monitor reports on U.S. economic growth in the second quarter and private-sector employment from ADP. These numbers will affirm the economy's stability amid high interest rates. As it was already mentioned, data now play an unprecedented role in shaping market sentiment. If the US labor market weakens in August, it will provide an additional reason for the Federal Reserve to slow down rate hikes.

In Asia, the MSCI Asia Pacific index retreated from its highs as the strong rally in Chinese stock markets subsided. Earlier, major indices rose: the Hang Seng index surged by 1.4% after reports that Chinese state creditors were preparing to lower rates on most outstanding mortgages.

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The cryptocurrency market is also showing signs of revival. Bitcoin surged by over 6% in the previous session as a US court's decision on a spot ETF Bitcoin potentially paved the way for the country's first exchange-traded fund of its kind. As for commodities, West Texas Intermediate oil is rising for the fifth day. Gold stabilized after reaching its August peak.

Ass for the S&P 500, demand for the index persists, but upward potential is constrained by crucial fundamental statistics. Bulls now need to take control of $4,515. From this level, they can push the price to $4,539. Bulls also should fix the price above $4,557, reinforcing the bullish market. If demand weakens amid subdued risk appetite, bulls will have to protect $4,488. Breaking through this level, the trading instrument may return to $4,469 and $4,447.

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