S&P500 is entering the home stretch | 27 Novembro 2015

The forecast for the week November 23-27:

XAU/USD:

From Tuesday November 24 we are to open short positions with precious metals for two reasons. One is that the second estimate of US GDP for the third quarter will be published this day. Revised data for the most part of macroeconomic indicators point to a possible revision of the index to the higher level. Positive report would support the US currency, because less than in a month the meeting of the Federal Reserve is hold, where the interest rate can be raised. The stronger data we will receive in the remaining time until December 16, the higher the confidence investors regarding raising of the interest rate in the United States will be. The yield on the two-years' US treasury bonds, which reflect expectation on the interest rate, has been showing the upward trend for five trading weeks in run that will certainly have a positive effect for the US dollar and, in turn, will put a pressure on the gold price. Secondly, a significant imbalance of the global supply and demand on the oil market is still the question of the agenda. Investors are beginning to lay the factor of negative outcome of OPEC meeting in quotes. The last week rumors were that the OPEC summit in Vienna in early December will fail to agree to reduce production quotas. In my opinion, these rumors are founded, given the failure of the last meeting in mid-October, as well as increased production volume of the key players. Thus, the negative trend in the market of black gold will help to reduce expectations on inflation, which ultimately will bring down the quotations of XAU/USD. So, this week we should open Sell positions with XAU/USD on growth of quotations to 1081/1091 and take profit around 1065.

XPT/USD and XPD/USD:

This week we should expect predominance of bullish mood. On the last trading day of the last week, the United Kingdom reported a significant increase in car production for the first ten months of this year. This is not surprising, since the positive dynamics contributes to a strong labor market: growth of income helps to increase consumer expenditures. This fall, the positive trend in the car industry is also observed in the United States and China, but the platinum group metals ignored this factor against the backdrop of global decline of prices on the commodity market. It should also be noted that the strong labor market data in the US in October (fall of the unemployment to the level of 5%, and growth of average earning by 0.4% compared to September) will support demand in cars in November and December, which should also provide support for platinum group metals. In our previous review we pointed expected stabilization of the market of industrial metals, but from 16 to 20 November correction of XPT/USD and XPD/USD was fairly moderate. So, this week we should open Buy positions with XPT/USD on drop of quotations to849/839 and take profit around 879 and Buy positions with XPD/USD on drop of quotations to 553/543 and take profit around 579.

S&P500:

In the first half of the week we expect dominance of "bullish" mood for two reasons. First, on Tuesday the second estimate of US GDP for the third quarter will be published and we can expect a revise of the index to the higher level against the background of more precise positive macroeconomic indicators. Secondly, the last week a steady demand in "risk assets" on all continents had been observed, which will allows bulls to test strength of the psychological level 2100. But then, in my view, we can expect downward movement on the background of closure of long positions. On the one hand, positive GDP release will support the stock market in the short term, and the other will add downside risks, as on the bond market the yield of the two-years' treasury bonds can be increased. At the end of the last trading week this yield grew by 10 points and continuation of the upward trend will force stock traders to close "long positions". Strong growth of bond yields was usually perceived negatively by investors in the securities market, becaused it raised expectations of tighter monetary policy hold by the US Federal Reserve. It is impossible to ignore reduction in net profit of the majority of leading corporations in the background of revaluation of the national currency. US dollar index basket is approaching to the current year High (100.27) and continuation of the upward trend will have a negative impact on financial performance of US corporations in 2016, and the market, as it is known, takes into account all the factors in advance. So, this week we should expect flat 2040 -2115.