This week features a mix of critical economic releases, including inflation data, employment figures, and PMI updates, which are set to influence market sentiment. On the technical side, the S&P 500 remains in an uptrend despite a recent pullback, with key indicators still pointing to bullish momentum. Fundamentally, investor focus will be on the interplay between economic data and broader concerns, such as inflation and policy uncertainty, as markets navigate these pivotal developments.
Overview
This week features a mix of critical economic releases, including inflation data, employment figures, and PMI updates, which are set to influence market sentiment. On the technical side, the S&P 500 remains in an uptrend despite a recent pullback, with key indicators still pointing to bullish momentum. Fundamentally, investor focus will be on the interplay between economic data and broader concerns, such as inflation and policy uncertainty, as markets navigate these pivotal developments.
Key Economic Events
Tuesday 15:30 (GMT+2) - Canada: CPI m/m (CAD)
Wednesday 09:00 am (GMT+2) - UK: CPI y/y (GBP)
Thursday 15:30 (GMT+2) - USA: Unemployment Claims (USD)
Friday 09:00 am (GMT+2) - UK: Retail Sales m/m (GBP)
Friday 10:15 am (GMT+2) - Europe: French Flash Manufacturing PMI (EUR)
Friday 10:15 am (GMT+2) - Europe: French Flash Services PMI (EUR)
Friday 10:30 am (GMT+2) - Europe: German Flash Manufacturing PMI (EUR)
Friday 10:30 am (GMT+2) - Europe: German Flash Services PMI (EUR)
Friday 11:30 am (GMT+2) - UK: Flash Manufacturing PMI (GBP)
Friday 11:30 am (GMT+2) - UK: Flash Services PMI (GBP)
Friday 15:30 (GMT+2) - Canada: Retail Sales m/m (CAD)
Friday 16:45 (GMT+2) - USA: Flash Manufacturing PMI (USD)
Friday 16:45 (GMT+2) - USA: Flash Services PMI (USD)
Technical Analysis
The S&P 500 fell 2.9% from its peak of 6031.38 on November 11 as bullish momentum faded, indicated by a negative divergence between the price and the Momentum oscillator and the Relative Strength Index (RSI). However, the stock market index that tracks the performance of 500 of the largest publicly traded companies in the United States remains on an uptrend trajectory, with prices hovering above the 50-period Exponential Moving Average. Also, the Momentum oscillator registers values above the 100 baseline, and the RSI remains above 50, both indicating an uptrend.
If the bulls maintain control of the market, the S&P 500 could retest the high of 6031.38. Conversely, if sellers take over, immediate technical support is at 5809.16.
Potential Upside Targets
Should the bulls maintain market control, traders may direct their attention toward the four potential resistance levels below:
6031.38: The initial resistance is 6031.38, which represents the high point from November 11.
6096.63: The second price target is identified at 6096.63, corresponding to the weekly resistance, R2, calculated using the standard Pivot Points methodology.
6144.48: The third target is established at 6144.48, aligning with the 261.8% Fibonacci Extension drawn from the swing high, 5869.18 to the swing low, 5699.03.
6419.79: An additional price target is estimated at 6419.79, which corresponds to the 423.6% Fibonacci Extension drawn from the swing high, 5869.18 to the swing low, 5699.03.
Potential Downside Targets
Should the sellers take market control, traders may consider the four potential support levels listed below:
5889.63: The first level of support is determined at 5889.63, representing a peak from October 17 and the 20-period Exponential Moving Average.
5809.16: The second support level is identified at 5809.16, reflecting the 23.6% Fibonacci Retracement drawn from the swing low of 5089.78 to the swing high of 6031.38.
5699.03: The third support level is seen at 5699.03, corresponding to a trough formed on November 4.
5449.47: An additional downward target is observed at 5449.47, corresponding to the 61.8% Fibonacci Retracement drawn from the swing low of 5089.78 to the swing high of 6031.38.
Fundamentals
Wall Street is closely watching Donald Trump's potential return to the presidency, with the stock market once again a central focus of his economic approach. His proposed policies—such as broad tariffs, stricter immigration controls, and tax cuts targeting corporations—are raising concerns about inflation and economic growth. However, many believe his sensitivity to market performance will push him to prioritize stability. As highlighted by Bloomberg, tighter financial conditions and high equity valuations could restrict his ability to implement large-scale fiscal stimulus, as seen in his first term.
Conclusion
In conclusion, this week brings a mix of critical economic indicators, highlighted by PMI releases across major regions, providing insights into manufacturing and services sector performance. The S&P 500 remains in focus after slipping 2.9% from its November 11 peak, with technical indicators still suggesting an uptrend. Investors will also track inflation data, unemployment claims, and retail sales figures for further clues on economic momentum. As markets weigh these developments, both bullish and bearish scenarios remain plausible, depending on the strength of incoming data and broader sentiment.