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US market: review and forecast for September 29. Investors assess risks

US market: review and forecast for September 29. Investors assess risks

The market the day before

Trading on September 28 on American stock exchanges ended in a deep minus. The S&P 500 index dropped 2.04% to 4,353 points. The Dow Jones lost 1.63% and the Nasdaq fell 2.83%. Only the energy sector showed positive dynamics (+0.46%), despite a slight decline in oil prices. Due to the aggravation of the risks of semiconductor shortage, the IT sector fell into the outsiders (-2.98%), the company was made up of telecoms (-2.79%).

Company news

  • Acceleron Pharma (XLRN: +2.2%) is supposedly preparing for a takeover by Merck (MRK).
  • Kirkland Lake Gold (KL: -7.7%) has announced a merger with Agnico Eagle (AEM).
  • Peloton Interactive (PTON: -4.6%) came under pressure due to Amazon's (AMZN) plans to release its own Halo View fitness tracker and provide a service for Halo Fitness workouts.

We expect

Today, global stock markets are showing moderately positive dynamics, partially offsetting yesterday's decline. However, the situation still contributes to the flight of investors from risk. The increase in US government bond yields is mainly due to a sharp increase in inflation expectations caused by rising energy prices and continued pressure on supply chains. The "hawkish" results of the September FOMC meeting also contribute to an increase in the profitability of treasuries. The growth factor gives way to the factors of reflation and economic opening. Given the large contribution of technology giants to the overall result of corporate profits and ensuring economic growth, concerns about the consequences of the rate change for the wider market are increasing. Another reason for concern is the high rate of change in the yield of treasuries: it has grown by more than 20 bps in just a few days.

The uncertainty is also connected with the protracted discussion by US lawmakers of an infrastructure spending package. Serious disagreements remain between Democrats over the amount of funding and the content of the program of these reforms. Another issue on which congressmen are unable to reach a compromise is raising the national debt ceiling. Market participants are also concerned about the upcoming corporate reporting season. The dynamics of the revision of the results forecasts is weakening. There are more and more doubts that they will coincide with the expectations of the market or will be above them. The same applies to forecasts for 2022, which may turn out to be too optimistic, since they do not fully take into account the adverse impact of supply chain failures, which has already been noted by FedEx (FDX), Nike (NKE) and Costco (COST).

  • Asian stock markets showed mostly negative dynamics following the September 29 session. China's CSI 300 fell by 1.02%, Japan's Nikkei 225 fell by 2.12%, only Hong Kong's Hang Seng rose by 0.7%. EuroStoxx 50 rose by 0.92%.
  • Risk appetite is uncertain. The yield of 10-year treasuries is 1.52%. The price of Brent futures drops to $78.5 per barrel. Gold rose to $1,739 per troy ounce.

In our opinion, the S&P 500 will hold the upcoming session in the range of 4350-4400 points.

Macrostatistics

The publication of significant macrostatistics is not scheduled for today.

Technical picture

On the eve of the S&P 500 index could not stay above the 50-day moving average. The RSI also indicates a downward trend. If the negative mood in the markets persists, the benchmark may test a local minimum at around 4,300. In case of its breakdown, the S&P 500 is able to continue moving to the support zone 4230-4260.

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Sep 13, 2021
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Sep 06, 2021
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