S&P 500

Next week is a busy one on the fundamental-front. We begin a new month on Wednesday, and with it brings the November FOMC meeting. The market, as per the CME FedWatchTool, shows Fed fund futures pricing in virtually no chance of a rate increase. However, at this time there is a 98% probability of a 25-bps increase at the December meeting. Barring a surprise increase on Wednesday the market will be focused on the policy statement. ‘High’ impact data releases on the docket begin on Monday with Core Personal Consumption Expenditure, Consumer Confidence on Tuesday, ISM Manufacturing on Wednesday, and to conclude the week on Friday we have the October jobs report. The Non-farm payrolls figure is expected to show a sharp rebound of +315k jobs added during October after the loss of 33k jobs in September in the wake of hurricanes hitting the U.S. For release details, see the economic calendar.

After putting in a bearish engulfing day on Monday we saw weakness set in, but that turned out to be short-lived as the S&P found buyers just below the June trend-line it was using as support during the earlier part of the month. Friday led to a new record high to close out at 2578. It’s unclear if this will continue to extend from here, but betting against rising prices is a tough wager these days so we’ll give the benefit of the doubt to the prevailing trend. A period of consolidation would do some good for working off overbought conditions before moving higher. On a dip back lower keep an on eye on the June trend-line and last week’s low of 2544.

S&P 500: Daily

DAX

On Thursday, the ECB announced that they will extend their bond-buying program beyond December until September 2018, halving the current €60 billion per month to €30 billion. The central bank left all key rates unchanged and said it plans to keep them at current levels for an extended period of time. This dovish outcome resulted in euro selling and buying in European equity markets. Looking ahead to next week, there are a few ‘high’ impact data points to keep market participants on their toes. On Monday, German CPI will be released, Euro-zone GDP & CPI on Tuesday, and Thursday brings the October German employment report. Markets will also be keeping an eye on how U.S. markets respond to Wednesday’s FOMC meeting and the U.S. jobs report on Friday.