This Week: Can US500 index return above 6,000?

• US500 immediate resistance at 50-day SMA; critical support around 5880
   
• In focus this week: FOMC minutes; monthly US nonfarm payrolls.
   
• US500 could be restored above 6k / 21-day SMA if markets restore bets for more Fed rate cuts in 2025
   
• US500 could be dragged down to 100-day SMA if incoming data supports fewer Fed rate cuts this year
   
• US markets closed this Thursday (Jan. 9th) for funeral of former US President Carter

 

In recent sessions, the US500 has been resisted at its 50-day simple moving average (SMA).

Despite posting 57 different record highs in 2024, the wind was knocked out of US stock market bulls (those betting prices will go higher), following the Fed's hawkish message in mid-December.

Recall that, the Fed and markets are now projecting "only" 50-basis points in rate cuts for 2025.

That 50-bps figure is lower than the 75-bps in rate cuts previously expected for this new year.

NOTE: US stock indices then to jump higher at the thought of US interest rates moving lower.

 

To the downside ...

The US500 index has found critical support around the 5880 zone, as the price region had previously:

• repelled bears on several occasions since the mid-December FOMC meeting
   
• fended off bulls during the October 2024 cycle highs

Also since that surprisingly hawkish mid-December FOMC meeting, dips below its lower Bollinger band have also prompted rebounds.

 

Key events slated for the first full week of 2025 may determine the US500's fortune this week.

Events Watchlist:

• Wednesday, Jan 8th: FOMC meeting minutes

Recall that the Fed’s decision to lower its benchmark rates back in December was a “close call”, according to Fed Chair Jerome Powell.

If the FOMC meeting minutes reveal that the voices supporting no rate cut last month were louder than expected, with less of a bias for lowering rates further in 2025, that could drag the US500 index towards its 100-day SMA just above the 5,800 psychological level.

 

• Friday, Jan 10th: US December nonfarm payrolls report (NFP)

Here's what economists predict for this pivotal monthly US jobs report:

- Headline NFP (nonfarm payrolls): 160,000
(if the US jobs market added 160k new jobs last month, that would be fewer than November’s 227k headline figure,)

- December unemployment rate: unchanged at 4.2%.

A weaker-than-expected set of NFP prints that reawaken the Fed’s willingness to cut rates should boost riskier assets, including US stock indices.

If so, that could push the US500 back to its 21-day SMA around the 6,000 big round number and beyond.

 

 

Here’s a comprehensive list of other key economic data and events due this week:

Monday, January 6

• CN50 index: China December PMIs
• EUR: Germany December CPI
• US400 index: US November factory orders; speech by Fed Governor Lisa Cook

Tuesday, January 7

• CN50 index: China December PMIs
• TWN index: Taiwan December CPI and PPI
• EUR: Eurozone December CPI; November unemployment rate
• US30 index: Speech by Richmond Fed President Thomas Barkin
• NAS100 index: Speech by Nvidia CEO Jensen Huang

Wednesday, January 8

• AUD: Australia November CPI
• GER40 index: Germany November factory orders; Eurozone December economic confidence and November PPI
• US500 index: FOMC meeting minutes

Thursday, January 9

• AU200 index: Australia November retail sales and trade balance
• CHINAH index: China December CPI and PPI
• TWN index: Taiwan December trade balance
• EU50 index: Eurozone November retail sales; Germany November industrial production and trade balance
• USDInd: US initial weekly jobless claims (possibly delayed); speeches by Philadelphia Fed President Patrick Harker, Richmond Fed President Thomas Barkin, Kansas City fed President Jeff Schmid
• US markets closed for funeral of former US President Jimmy Carter

Friday, January 10

• MXN: Mexico November industrial production
• CAD: Canada December unemployment
• US500 index: US December NFP

 

 

US500 S&P 500 Stocks indices FOMC Federal Reserve fed minutes US jobs report Nonfarm Payrolls