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16.06.2023 12:50 PM
US premarket for June 16: US stock market bounces back

US stock index futures extended their gains on Friday, showing their best week in over two months. Risk appetite remains steady as investors anticipate China's stimulus and show high interest in AI companies.

S&P500 futures added nearly 0.3% following yesterday's record rise, while the tech-heavy NASDAQ jumped by 0.4%. This week, the MSCI World index rose by 3%, marking its best performance since the end of March. Asian stock indices also demonstrated a robust rally on Friday.

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Anticipation that the Federal Reserve will end its tightening cycle sooner rather than later, following a pause in rate hikes this week, bolstered risk asset appetite. Concurrently, expectations are growing that the Chinese government will increase spending to support economic growth rates. This news spurred the shares of the mining, energy sectors, and some luxury goods.

In Europe, consumer sector shares enjoyed a rise following a strong leap in LVMH and Asos Plc shares, which each gained around 7.0%. In the US, Adobe Inc. surged by 3.9% in premarket trading after a report indicated that profits exceeded expectations, and analysts optimistically evaluated the future AI potential. Apple Inc. shares, whose market capitalization is nearing $3 trillion, also traded slightly higher following a week-long rally.

Some economists at Bank of America Corp. recently admitted to erroneous forecasts for the first half of the year, as the US economy managed to avoid a recession and credit crisis, and an AI-driven tech rally rejuvenated risk appetite. However, they drew parallels with 2000 or 2008, reminding us of the grand rally before a significant crash.

Treasury yields increased across the board, and the US dollar continued to lose ground.

Gold rebounded from its weekly lows, indicating a return of demand for the metal. The oil market also traded within a narrow sideways channel, hinting at further potential decreases.

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As for the S&P 500 index, demand for the trading instrument remains fairly high. Bulls have a chance to continue the upward trend, but they should defend $4,410, a level from which a surge to $4,447 may happen. Maintaining control over $4,488 is another priority for bulls, which will consolidate the bullish market. If the index declines due to diminishing risk appetite, bulls should protect $4,410 and $4,380. Breaching this level, the instrument may return to $4,350 and $4,320.

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