Stocks Down, Bitcoin Surges and Jobs Report Awaited

U.S. stocks are starting the week with a downward trend. Bitcoin has experienced a notable rise, surpassing the $40,000 mark, while crude oil is declining amid uncertainties regarding the actual impact of the recently announced OPEC+ production cuts. Concerns about an escalating conflict in Israel and Gaza further added to Monday's market declines. Investors are anticipating the significant jobs report scheduled for Friday.

Global stocks, after a four-session winning streak, are poised to decline on Monday, and Treasury yields are rising as investors await U.S. labor market data to gauge the potential trajectory of the Federal Reserve's rate policy. Softening economic data and recent comments from Fed officials, including Chair Jerome Powell, have raised expectations that the central bank may cut rates as soon as March. The upcoming Fed policy meeting is scheduled for Dec. 12-13.

U.S. Treasury yields moved higher, with the 10-year yield standing 4 basis points higher at 4.261%. The dollar regained ground on Tuesday, near a one-week high against major peers. Analysts attribute the dollar's rise partly to a reversal of its recent heavy selloff, marking its steepest monthly decline in a year in November.

On Monday evening, the S&P 500 retreated as major technology stocks, including Microsoft, Apple, Nvidia, and Amazon, dipped over 1%, influenced by higher U.S. Treasury yields making stocks less attractive.

Big tech stumbled, with Alphabet Inc Class A and Apple Inc facing challenges, including disruptions in iPhone production in India. Meta Platforms Inc fell more than 1% after CEO Mark Zuckerberg sold 680,000 shares in November. Spotify Technology SA rose over 7% after announcing plans to cut 1,500 jobs, or about 17% of its workforce, to trim costs.

Cryptocurrency-related stocks, including Coinbase Global, Riot Platforms, and Marathon Digital, rallied between 5% and 9% after Bitcoin crossed $40,000 for the first time this year. The optimism is fueled by ongoing expectations that a spot Bitcoin exchange-traded fund could be approved by U.S. regulators.

The main macroeconomic focus for the week is Friday's jobs report for November, which may influence the Fed's interest rate path and the potential for a "soft landing." U.S. labor market data, starting with the ADP National Employment Report on Wednesday and culminating in the government's wider payrolls report on Friday, will be closely watched. Monday's data showed a larger-than-expected drop in new orders for U.S.-made goods in October.

Traders expect the central bank to keep rates unchanged at its upcoming meeting, with a 58% probability of rate cuts by March 2024. Despite the optimism for rate cuts, some analysts caution that markets may have been too quick to price in lower interest rates. Consequently, the entire stock market could uphold a favorable perspective by the conclusion of this year.

Data for Technical Analysis (5H) CFD US 500 [S&P 500]

Resistance : 4569.3, 4572.2, 4577.1

Support : 4559.5, 4556.6, 4551.7                    

5H Outlook

Source: Investing.com              

Buy/Long 1 If the support at the price range 4549.5 - 4559.5 is touched, but the support at 4559.5 cannot be broken, the TP may be set around 4569.3 and the SL around 4545.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 4569.3 - 4579.3, TP may be set around 4584.0 and SL around 4553.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 4569.3 - 4579.3 is touched, but the resistance at 4569.3 cannot be broken, the TP may be set around 4556.4 and the SL around 4584.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 4549.5 - 4559.5, TP may be set around 4542.0 and SL around 4573.0, or up to the risk appetite.       

Pivot Points Dec 5, 2023 03:24AM GMT