Stock Market Outlook for Thu Nov 7 2024 – All About The Fed – Higher

Prior Trading Day Summary:

On Wed Nov 6 2024 investors poured money into stocks that had been sitting on the sidelines waiting for a resolution to the Presidential election. The election was clear without any question on the outcome and that ended any thought of “what if” for the election result. Investors ran into stocks and volumes showed almost a panic buying mood especially among banks and many NASDAQ stocks. By the close the S&P volume was 6.4 billion shares 60% more than we saw on Tuesday. The SPX closed up 146 points to a new closing high of 5929, just 71 points away from 6000. New 52 week highs were 471 while new lows were just 52.

The NASDAQ soared 544 points to a new all-time closing high of 18.983 on 8.4 billion shares. There were 644 new 52 week high and 155 new lows.

The indexes soared on Wednesday and are overbought but that does not mean they cannot move higher this week. Today we get the latest Fed decision on interest rates. A quarter point cut is expected.

Let’s review the technical signals from Wed Nov 6 2024to see what they predict for Thu Nov 7 2024.

Stock Market Outlook: SPX Closing Chart For Wed Nov 6 2024

The index closed above the Upper Bollinger Band and all major moving averages. This is bullish.

The closing candlestick is bullish for Thursday although signaling the market is very overbought. There is a huge gap from Tuesday’s close and Wednesday’s open. Often the market will fail in that gap at some point in a pullback but the chance of it happening this week is none at present.

The 21 day moving average rose on Wednesday and is at 5812. This is bullish.

The 50 day moving average is higher at 5712. This is bullish.

The 100 day moving average is rising and closed at 5597 which is bullish.

The 200 day moving average is in an uptrend and closed at 5363 which is bullish.

The Lower Bollinger Band is just above the 50 day moving average which is bullish. The Upper Bollinger Band is moving higher which is bullish.

The S&P chart is bullish for Thursday.

SPX Stock Market Outlook review of Wed Nov 6 2024

Stock Market Outlook: Technical Indicators Review

Stock Market Outlook for Thu Nov 7 2024 

The index is overbought and some dips should be anticipated for today, especially in mid to late morning. The open though could be higher before we see some selling to take profits. Despite being overbought, the technical indicators are signaling more room to move higher before the market is extremely overbought.

On Thursday we get the Fed’s latest decision on interest rates at 2:00 PM. The overwhelming estimates are for a quarter point cut. If that fails to happen we could see some weakness but a flat close is more likely. If the rate cut happens as expected, the index will close higher.

One cautionary signal is from the bond market which soared yesterday. The bond market cannot continue to rise and stocks continue to make new highs repeatedly. At some point investors will see the higher Treasury yields as a concern and we should expect some selling. For Thursday though I am not expecting the will happen.

Potential Economic and Political Market Moving Events

Monday:

10:00 Factory Orders came in as estimated, down -0.5%

Tuesday:

8:30 Trade deficit came in almost as expected at -$84.4 billion

9:45 S&P final US services PMI came in at 55.0

10:00 ISM Services rose to 56.0 rather than dips as anticipated

Wednesday:

no reports

Thursday:

8:30 Weekly Initial Unemployment Insurance Claims are estimated at 220,000, up from 216,000 prior

8:30 Productivity is estimated to come in at 2,5%

10:00 Wholesale inventories is estimated at -0.1%

2:00 Fed’s Interest rate decision

3:20 Fed Chair Powell’s press conference

3:00 Consumer credit is estimated at $13.0 billion, up from $8.9 billion prior