S&P 500 Fundamental Analysis – Forecast for the week of September 19, 2016

The S&P 500 will enter a crazy week at 2139.17 and is a strong buy as traders expect the markets to recover after the FOMC decision. The strength of the US dollar is weighing on equities while many traders moved to the sidelines ahead of this week’s major events. The index is down remains up 9.25% for the year and gained 0.53% this week but actually was trading at 2188 just a week ago.

US stocks ended Friday lower after oil prices and a spat involving Deutsche Bank saw investors flee energy and banking stocks – but resilient on the week. The S&P 500 bellwether closed down 0.4% at 2,139. Although it had been a rollercoaster ride of a week, with Fed speakers giving and removing hope of rates staying on hold next week, and data and oil prices that added to the gyrations, the top index ended just 21 points lower than where it closed last Friday – in the wake of Fed Hawk Eric Rosengarten’s comments.

Range Resources Corp was the top faller, of 5.1% to $37.38 after the company announced the completion of its merger with and acquisition of the stock of Memorial Resource Development Corp. followed by Oracle down 4.8% at $38.92.

Germany’s largest lender Deutsche Bank which faces a $14bn settlement claim from the US in respect of accusations it packaged toxic mortgages between 2005 and 2007. The subprime mortgage credit crisis that consumed Wall Street and interbank markets, and led to the Eurozone sovereign debt crisis, had its origins in 2007.

US tech giant Apple has added some US$50bln to its market value amid positive reviews and strong pre-order sales of the iPhone 7. Shares in the tech firm gained 3.5% yesterday, after climbing 2.2% and 2.4% on Monday and Tuesday respectively.

The iPhone 7 is set to hit shelves around the world tomorrow (Friday) and despite initial fears, it seems investors are becoming more optimistic about Apple’s latest offering.

Bullish talk around pre-orders from big US wireless carriers like Sprint and T-Mobile has helped to drive investor sentiment as well as the share price.

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This Week’s Economic Events That You Should Be Monitoring:

Date Country Name Volatility Previous
9/20/2016 AUD RBA Meeting’s Minutes 3
9/20/2016 CAD BoC Governor Poloz 3
9/21/2016 AUD Mid-Year Economic Outlook 3
9/21/2016 JPY BoJ Interest Rate Decision 3 -0.1
9/21/2016 JPY BoJ Monetary Policy Statement 3
9/21/2016 JPY BoJ Press Conference 3
9/21/2016 USD FOMC Economic Projections 3
9/21/2016 USD Fed’s Monetary Policy Statement 3
9/21/2016 USD Fed Interest Rate Decision 3 0.5
9/21/2016 USD FOMC Press conference 3
9/21/2016 NZD RBNZ Interest Rate Decision 3 2
9/22/2016 EUR ECB President Draghi’s Speech 3
9/23/2016 AUD RBA’s Governor Lowe Speech 3

Government Bond Auctions

Date Time       Country           Auction

Sep 19 11:00 Belgium Eur 2.8-3.5bn 4.5% Mar 2026,

Sep 20 11:30 UK Gbp 2.5bn 1.5% Jul 2047 Gilt

Sep 21 10:30 Denmark Holds bond auction

Sep 21 11:03 Sweden Sek 2bn 4.25% Feb 2019 & Sek 1.5bn 1.5% Nov 2023 bonds

Sep 21 11:30 Germany Eur 4bn 0% Oct 2021 Bobl

Sep 22 17:20 Italy Announces details of bond auction

Sep 22 19:00 US Usd 11bn 0.125% Jul 2026 TIP

Sep 26 11:30 Germany Eur 1.5bn Sep 2017 Bubill

Sep 26 13:00 Norway Details of bond auction on Sep 28

Sep 27 11:00 Netherlands Eur 0.75-1.25bn 4% Jan 2037 DSL

Sep 27 11:10 Italy Holds zero coupon/BTP€i auction

Sep 28 11:05 Norway Holds bond auction

Sep 28 11:30 Germany Eur 4bn Sep 2018 Schatz

Sep 29 11:03 Sweden Holds I/L bond auction