S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
Facts
- Wall Street indices pulled back on September 25, shortly after the release of stronger-than-expected U.S. GDP and durable goods orders data, along with lower jobless claims.
- Donald Trump stated that Federal Reserve interest rates should be cut even as data points to economic growth.
- The US500 contract rebounded slightly after declines and was trading flat as of 9:35 AM GMT.
Recommendation
- Long position on US500 at market price
- Take Profit: 6730
- Stop Loss: 6560
Opinion
Stronger U.S. macroeconomic data should support a bull market in equities. Yesterday’s comments from Donald Trump, in a sense, suggest that next year the Fed will not “fear cutting rates” despite robust U.S. economic data and will show greater tolerance for inflationary risk. The priority would shift toward lowering debt servicing costs. For the equity market, such a scenario appears optimistic. While Powell and the Fed may “delay” easing this year, it still seems somewhat inevitable. Strong U.S. data should, overall, be welcomed by the market.
Concerns remain around the potential for a government shutdown, which occurred during Trump’s previous term. However, if one is avoided, we can expect equities to resume their upward trend. Looking at the chart, the two previous corrections—in August and at the turn of August and September—had a similar scope to the current pullback. If the market rebounds from the present level, we can consider the decline as another 1:1 correction within the broader uptrend. We therefore recommend taking a long position on US500 at the market price, with a target of 6730 points and a stop-loss at 6560 points, determined using price action methodology.
Source: xStation5
