What’s inside:
- A good number of key events on the docket for the U.S., S&P 500 in a state of vulnerability
- DAXÂ takes a hit, testing trend-line support; a couple of important pieces of data due out
- FTSE 100 has room to go before support, keep an eye on sterling; no ‘high’ impact data scheduled
In last week’s forecast, we expressed our concern that risk was rising for the indices, but that the trend still remained upward until we saw a break in the bullish price action. As the week concluded we saw cracks in the lining begin to develop.
Next week we have a few ‘high’ impact data points which could bring volatility, but as typically the case the brunt of impact may be most felt in the FX/rates space, not in the indices. With that said, however, we need to be mindful when managing risk around these events.
S&P 500
Looking to the most important scheduled economic events in the U.S., we start the week off on Monday with Durable Goods Orders at 13:30 GMT; Tuesday holds Q4 GDP at 13:30 as well as Advance Goods Trade Balance, followed by Consumer Confidence at 15:00; Wednesday brings Core Personal Consumption Expenditure at 13:30, then ISM Manufacturing at 15:00; and to end the week ISM Services/Non-manufacturing at 15:00, followed by Yellen speaking in Chicago at 18:00.
Looking to the techs, the S&P finally showed some weakness at the end of the week after a torrid run for most of February. Volatility has been compressed for several months and likely due for a pop sooner rather than later; March can be a volatile month. The first area of support to watch on weakness is the February trend-line. How the market responds to support should it start dropping will provide insight into whether a healthy pullback is all we will see, or if something more sinister is kicking off.
S&P 500: Daily
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DAX
Key Eurozone and German data on the docket begins with Eurozone CPI at 10:00 GMT on Tuesday; German employment data on Wednesday at 8:55, and later in the day German CPI at 13:00; Friday we will get a look at Italian GDP for Q4 at 9:00, but not likely to have much impact on German equities.
