US Market Technicals Ahead (8 November – 12 November 2021)Investors are to take note of the end of Daylight Saving Time (DST) that will effectively have the US exchanges open at an hour later, depending on your time zone starting today.
$SPX is currently closed at 200% ATR(14) away from its 10 days moving average, the first time since September 2020. Data on inflation will be the highlight of the U.S. economic calendar in the week ahead as investors continue to digest the Fed’s decision to begin tapering stimulus measures, marking the beginning of less accommodative monetary policy.
Earnings season is winding down, but there are still several companies set to report during the week. China’s Communist Party looks set to green-light a third term for President Xi Jinping.
Here’s what you need to know in the coming week.
Market Technicals
The benchmark index $SPX continues its high octane rally with a fresh new high established at 4,718 level, gaining +2.00% (+92.15 points) during the week.
$SPX is currently closed at 200% ATR away from its 10 days moving average, the first time since September 2020.
The immediate support to watch for $SPX this week is at 4,660 level, a break of its short term uptrend momentum.
Inflation data
Data on producer price inflation for October is scheduled for release on Tuesday, followed a day later by figures on consumer price inflation.
The CPI numbers are expected to hit their highest levels so far post-pandemic, with economists forecasting an increase of 0.6% month-on-month and 5.8% year-on-year. Core inflation, which excludes food and energy costs, is expected to rise by an annualized 4.3%.
At its latest meeting the Fed stuck to the view that high inflation would prove “transitory” and is not likely to require a rapid increase in interest rates, prompting investors to call it a “dovish taper.”
While the central bank has so far managed to communicate plans to begin scaling back its monthly bond purchases without triggering a taper tantrum, elevated inflation figures that fuel rate hike speculation could change that.
Earnings
Better-than-expected third-quarter earnings have boosted equities and Wall Street’s main indexes closed at record highs on Friday following a strong U.S. jobs report and positive data for Pfizer’s ($PFE) experimental antiviral pill for COVID-19.
Companies reporting in the coming week include entertainment company Walt Disney ($DIS), drugmakers AstraZeneca ($AZN) and BioNTech ($BNTX) along with Softbank ($SFTBY), PayPal ($PYPL), Coinbase ($COIN) and AMC Entertainment ($AMC),
China
The top leaders of the Chinese Communist Party are set to meet in Beijing from Monday through Thursday, where the decision-making Central Committee could give the go-ahead for an unprecedented third term for President Xi Jinping.
The meeting comes at a time when growth in the world’s second largest economy is faltering amid stringent measures to curb virus outbreaks, a clampdown on the property market, energy shortages and disrupted supply chains.
Data on Sunday showed that Chinese exports slowed in October, but still beat forecasts while imports fell short of forecasts, pointing to continued weakness in domestic demand.
