Wall Street ends six-week rally: investors await jobs data and major tech earnings

US equity market recap

The US equity market closed in mixed territory on Friday, with gains in tech offset by declines in the banking sector. The S&P 500 lost 0.96% over the week, the Dow Jones slid by 2.6%, and the Nasdaq 100 managed a slight gain of 0.14%.

Economic data released on Friday showed a 0.8% decline in headline durable goods orders for September. However, durable goods orders excluding transport rose by 0.4% month-over-month (MoM), exceeding expectations for a 0.2% decline. The University of Michigan's final October consumer sentiment reading was also revised upwards to 70.5 from 68.9, showing a modest drop from August’s 71.0.

Stock market movements

• New York Community Bancorp fell 8.2% to $10.55 after issuing softer earnings guidance
• Morgan Stanley and Goldman Sachs also saw declines of 2%
• Microsoft, Alphabet, Meta, and Amazon gained between 0.8% and 1.5%, as investors anticipate their upcoming earnings announcements. You can read our preview of Microsoft’s earnings report here.

Key economic events

This week’s economic calendar is packed with significant releases, including the advance estimate of the third quarter (Q3) gross domestic product (GDP) growth, non-farm payrolls (previewed below), and Job Openings and Labor Turnover Survey (JOLTS) job openings. Other key data releases include the Institute for Supply Management (ISM) manufacturing purchasing managers' index (PMI), the Conference Board (CB) consumer confidence, the personal consumption expenditures (PCE) inflation report, and personal spending and income figures.

Regarding the upcoming US election, Trump remains ahead in all key battleground states, suggesting a narrow regain of the White House is likely. The interest rates market begins the week with a 95% chance of a 25 basis point (bp) Federal Reserve (Fed) rate cut in November and a cumulative 44 bps of cuts expected by year-end.

What to expect from non-farm payrolls

Date: Friday, 1 November at 11.30am AEDT

September’s headline payrolls came in at 254,000, well above the forecasted 140,000. August’s figures were also revised upwards to 159,000 from 142,000, and July’s to 144,000 from 89,000. Additionally, the unemployment rate eased to 4.1%, its lowest in three months, down from 4.2%.

Robust jobs data and other resilient economic figures this month have eased concerns of a delayed Fed response. This data has also reduced expectations for aggressive Fed rate cuts this year. The Q3 GDP reading is anticipated to show solid growth of 3%.

In October, the US economy is expected to add 125,000 jobs, with the unemployment rate holding steady at 4.1%.

US unemployment rate chart

Nasdaq 100 technical analysis

The Nasdaq 100's progress has been underwhelming in recent months. However, as long as it stays above the short-term support at 20,000/19,850 and the more crucial support at 19,600/500, we anticipate it to attempt breaking the mid-July high of 20,690 before pushing towards 21,500.

If the Nasdaq 100 sees a sustained break below support at 20,000/19,850, followed by 19,600/500, it would signal a deeper decline towards initial support at 18,748, from the 200-day moving average. Below that are the September 18,400 low and uptrend support at 18,250, originating from the December 2022, 10,671 low.

Nasdaq 100 daily chart

S&P 500 technical analysis

Last week, the S&P 500 finished lower, ending its six-week winning streak.

Breaking below short-term uptrend support at approximately 5770/60, followed by a sustained break of medium-term horizontal support at 5670/50, would indicate a deeper decline towards the September low of 5402. Below that, there's support at 5333 from the 200-day moving average before reaching the 5119 low of August.

Conversely, while the S&P 500 remains above horizontal support around 5760/50, we expect the uptrend to continue towards 6,000.

S&P 500 daily chart

• _{Source: TradingView. The figures stated are as of 28 October 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}