2022-12-01 • Updated
BoA released the report with the bullish forecast for the S&P 500 and shared its technical analysis. It’s quite interesting as the S&P 500 has been dipping throughout September, and it has started recovering just by the end of the month. Analysts from Bank of America assured investors that September’s sell-off is a natural seasonal phenomenon and advised to hold on to the upside in the S&P ahead of November’s presidential elections.
As for the technical analysis, the chart has formed a “cup and handle” pattern, which implies that the S&P 500 is likely to rise up to 3 700 in the short term. Besides, they set the long-term target of 4 300. Bank of America emphasized that while the stock index is trading in a range between 3 000 and 3 200, the doors to the upside are open.
Elsewhere, the bank has noticed that investors have started to borrow more to buy stocks. Following this, the Financial Industry Regulatory Authority recorded the margin debt rose significantly in July and August. All this points to the fact that there is more confidence in further stocks’ rally among investors.
As you may know, the S&P 500 is mainly driven by the top 5 tech stocks such as Facebook, Amazon, Apple, Microsoft, and Google, which is called shortly FAAMG or “Big Five”. Their weight in the overall S&P 500 cap is enormous. According to Forbes, it hit a record of 36.6%. They have just gained during the virus pandemic and keep climbing up further. Tech stocks have helped the stock market to survive, while the energy, financial, and airline sectors have lagged. However, even those industries have started recovering already, showing slow, but steady growth.
The S&P 500 has bounced off the 100-day moving average at 3 200, showing strong bullish momentum. However, the 50 moving average at 3 350 has blocked the way to the upside. If the stock index manages to break through it, it may reach 3 400. Once the price moves above this level, the way to 3 580 would be open. Support levels are at 3 200 and 3 100.
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.
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