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11.09.2023 01:30 PM
US premarket on September 11: US stock market gradually gaining ground

US stock index futures opened with significant gains on Monday after the US Treasury Secretary expressed confidence in avoiding a recession next year. S&P 500 futures rose by 0.6%, while the tech-heavy NASDAQ increased by nearly 1.0%. The US dollar showed its sharpest drop in two weeks as investors took bullish cues from Yellen and positive data from China. The yen surged by more than 1% against the US dollar after Bank of Japan Governor Kazuo Ueda hinted at ending the negative interest rate program.

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In Europe, the Stoxx 600 index climbed by 0.5%. Tesla Inc. shares jumped by 5% in US premarket trading following an upgraded rating by Morgan Stanley. Italian banks outperformed their European counterparts after news that the government was considering changes to a contentious windfall profit tax. This week, all eyes will be on the European Central Bank's monetary policy announcement. A survey of economists reveals a split between those expecting a tenth consecutive rate hike and those anticipating a hawkish pause. US inflation data will be released on Wednesday, potentially influencing the US Federal Reserve's decision at the meeting on September 19.

Over the weekend, Yellen stated her confidence that the US could manage inflation without significantly harming the job market. "Every measure of inflation is on the road down," Yellen said. She also believes a recession will be avoided next year.

Regarding China's economy, it might stabilize after its sharp downturn. Economists noted that robust credit data released today suggested that recent real estate market support measures might be stimulating household mortgage demand, while corporate lending also sees rising demand. Against this backdrop, the yuan recovered from a 16-year low.

In the commodities market, copper, iron ore, and other metals benefited from the weakening US dollar while improved Chinese data bolstered sentiments.

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As for the S&P 500, demand for the index rebounded. Bulls should push the price to $4,488. After that, they may reach $4,515 from this level. Bulls also should maintain control over $4,539, reinforcing the bullish trend. If the index declines amid reduced risk appetite, bulls will have to protect $4,469. Breaching this level, the price may move back to $4,447, paving the way to $4427.

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