Financial Markets Update: S&P 500 Hits New High, Oil Prices Fall, and Economic Forecasts Revised

The S&P 500 reached its highest level since August 22, signalling a new bull market, while oil prices experienced a downward trend. Additionally, the UK's economic forecast was revised upwards, countering fears of a recession, while Canada's job numbers fell short of expectations. Let's delve deeper into these key factors and market movements.

Key Factors for Today

• S&P 500 hits highest level since August 22, entering a new bull market.
• Oil prices drop below $70 per barrel due to concerns over demand outweighing production cuts.
• The UK's GDP forecast is revised upwards by the Confederation of British Industry (CBI), indicating no recession.
• Canadian job numbers disappoint as the unemployment rate surpasses the forecast.

Market Movers

• The S&P 500 rose sufficiently to qualify for a new bull market, despite investors exercising caution ahead of impending inflation data and the Federal Reserve's rate decision. While concerns linger about the market's dependence on a few major tech companies, the index is venturing into overbought territories, with a focus on the 4400 level.
• Oil prices resumed their downward trajectory as Saudi Oil Minister Abdulaziz bin Salman highlighted efforts by his country and OPEC to counter market uncertainties and sentiment, targeting short sellers. Demand concerns continued to overshadow production cuts, resulting in crude prices slipping below $70 per barrel early on Monday. The resistance and support levels to watch in this tight range are $73.25 and $67.10 per barrel, respectively.

Economic Calendar

• Consumer Inflation Expectations
• New Zealand Visitor Arrivals
• Westpac Consumer Confidence Change

The Big News

The UK CBI injected optimism into the economy by revising its outlook for the country, forecasting a growth rate of 0.4% for this year. This positive revision marks a significant improvement from the previous estimate of -0.4%. Additionally, the CBI upgraded its forecast for next year, projecting a 1.8% increase in GDP compared to the previous estimate of 1.6%. The pound experienced marginal gains on Friday, despite the broader strength of the dollar, almost reaching $1.26. The currency now has potential resistance at $1.2681, while aiming to defend the $1.25 level.

On the other hand, Canada's job numbers disappointed as the country lost 17.3K jobs in May, falling short of the expected additions of 21.3K. The unemployment rate also exceeded forecasts, reaching 5.2% instead of the projected 5.1%. The majority of job losses occurred in the full-time segment, while hourly wage rates grew as anticipated, with an annual rate of 5.1%. As a result, the USDCAD pair slid for a fourth consecutive session, though it remained above $1.33 on Friday. There is now an increased likelihood of it reaching $1.3276 before gaining control. The short-term resistance lies below $1.3446.