The S&P 500 index, a comprehensive measure of the US stock market, opened higher this week after experiencing losses exceeding 2% over the past two weeks. The market's performance this week is expected to be influenced by a series of earnings calls and the Federal Open Market Committee (FOMC) meeting of the Federal Reserve.
On Monday, earnings reports from McDonald’s (NYSE:MCD) and SoFi (NASDAQ:SOFI) gave a boost to the index. The market is also expected to be influenced by Advanced Micro Devices (NASDAQ:AMD)' earnings report due on Tuesday, and the upcoming earnings calls from Airbnb and Apple (NASDAQ:AAPL) later this week.
Mike Wilson of Morgan Stanley (NYSE:MS) anticipates a further decline in the S&P 500 index, with a year-end target of 3,900. This forecast is based on declining consumer and business confidence, which he believes will hinder an equity rally into the New Year. According to Wilson, the index could see an additional drop of over 5%, reaching lows not seen since March.
In contrast, Goldman Sachs (NYSE:GS) views the current market conditions as a buying opportunity. The investment bank's perspective is based on its analysis of various factors including the performance of companies listed on the index and macroeconomic data.
The FOMC meeting on Wednesday will play a significant role in shaping market sentiment this week. The CME Group’s FedWatch Tool predicts a 97% likelihood that interest rates will remain unchanged at this meeting, decreasing to a 68% probability for the December meeting. Market participants are also awaiting the US Treasury's refunding announcement on Wednesday, which will detail its plans to sell tenures to offset Washington’s budget deficit.
The S&P 500 tracks the performance of 500 publicly owned companies selected based on criteria such as market capitalization, liquidity, domicile, public float, sector representation, financial viability, and representation of US industries. The index can be traded through various channels including retail brokers, spread betting platforms, Contracts for Difference (CFD), Index, Mutual and Exchange Traded Funds (ETFs). Its performance is influenced by factors including the aggregate performance of its component companies as revealed in their earnings reports, US and global macroeconomic data, interest rates set by the Federal Reserve, inflation levels, and other metrics impacting the Fed's decisions.
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