S&P 500: Maintaining a Neutral-to-Bullish Perspective

PEPPERSTONE:US500   US 500 Index
In a muted trading session on Monday, U.S. stocks took a cautious stance as the end of a positive month loomed and investors awaited key inflation metrics. By mid-morning, major indices showed marginal declines: the Dow Jones Industrial Average dipped by 0.1%, the S&P 500 edged 0.1% lower, and the NASDAQ Composite slipped by 0.1%. Despite a robust performance last week, marking the fourth consecutive week of gains, propelled by declining Treasury yields and moderating inflation figures signaling a potential slowdown in Federal Reserve rate hikes, the market exhibited a more restrained demeanor.

The NASDAQ Composite led the month's surge with a remarkable 12% gain in November, closely followed by the Dow Jones Industrial Average, which advanced over 9%, while the S&P 500 recorded an almost 11% uptick. However, as November draws to a close, caution prevails among investors, especially with the imminent release of crucial inflation data later in the week. The upcoming personal consumption expenditures (PCE) price index, slated for Thursday, is anticipated to reveal a 0.1% month-on-month increase for November, a notable decline from September's 0.4%. The core PCE, excluding food and fuel costs, expected to show a 3.5% year-over-year rise, down from the prior month's 3.7% and the lowest since mid-2021.

Technical analysis suggests a bullish trend for S&P500, with both the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) signaling buy signals. Resistance levels at 4580 in the short term and a potential reach of 5100, as predicted by Deutsche Bank strategists, in the coming weeks. A pivotal point at 4557 could guide price movements towards either direction, with a potential return to levels around 4547.

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