Gold, Crude Oil, & Goldman's Forecast for Stocks

Top things to watch this week

The Economic Calendar:

MONDAY: S&P Global Manufacturing PMI Final (8:45a CT), Construction Spending (9:00a CT), ISM Manufacturing Index (9:00a CT), Lisa Cook Speaks (5:50p CT)

TUESDAY: Redbook (7:55a CST), Factory Orders (9:00a CT), JOLTS (9:00a CT), Vehicle Sales (9:00a CT), Michelle Bowman (9:10a CT), John Williams Speaks (11:00a CT), Loretta Mester Speaks (11:05a CT), Mary Daly Speaks (12:30p CT)

WEDNESDAY:  MBA Morgage Applications (6:00a CST), ADP Employment Report (7:15a CT), Michelle Bowman Speaks (8:45a CT), PMI Composite Final (8:45a CT), ISM Services Index (9:00a CT), EIA Petroleum Stats Report (9:30a CST), Austan Goolsbee Speaks (11:00a CT), Jerome Powell Speech (11:10a CT), Michael Barr Speaks (12:10p CT), Adriana Kugler Speaks (3:30p CT)

THURSDAY: Challenger Job Cuts (6:30a CT), Balance of Trade (7:30a CT), Import & Export Prices (7:30a CT), Jobless Claims (7:30a CT), EIA Natural Gas Report (9:30a CT), Austan Goolsbee Speaks (11:45a CT), Loretta Mester Speaks (1:00p CT), Alberto Musalem Speaks (6:20p CT), Adriana Kugler Speaks (6:30p CT)

FRIDAY: US Unemployment Rate (7:30a CT), Susan Collins Speaks (7:30a CT), Thomas Barkin Speaks (8:15a CT), Michelle Bowman Speaks (11:15a CT), Baker Hughes Rig Count (12:00p CT), Consumer Credit Change (2:00p CT)

Key Events:

• Traders focus on jobs data this week. 
• ADP’s private employment report for March on Wednesday.
• Friday’s U.S. non-farm payrolls data, with economists expecting +200K jobs report. 
• OPEC+’s monitoring committee (JMMC) announcement on Wednesday.
• Very active Fed speaker schedule (see below in Interest Rates)
• Fed chair Jerome Powell will speak at a Stanford forum on Wednesday.  
• The earnings calendar is light, but we are watching BlackBerry (BB). 
• Highly anticipated car delivery report from Tesla (TSLA).

STOCK INDEX FUTURES

The S&P 500 finished its best first quarter since 2019. The S&P 500 Q1 returns were +10.05%, and the Nasdaq-100 was up a solid +8.42%

Gains were largely steady across the board, but tech companies were the ones to watch, especially the biggest beneficiary of AI hype, Nvidia.

The strongest sectors for Q1 are energy, financials, and industrials. The weakest sectors were consumer discretion and real estate.

The defensive hedges of gold and bitcoin also hit record highs.

INTEREST RATE FUTURES

Traders are positioning for a cut-rates and ask-questions-later mentality.

Listen to what the Fed speakers say this week – Cook, Williams, Mester, Daly, Goolsbee, Chair Powell, Barr, Kugler, Musalem, Barkin, and Bowman.

Our Takeaways:

• The last few week’s focus on central bank decisions might make this week seem uneventful.
• Central banks appear to be prioritizing rate cuts at the beginning of the easing cycle, even before all the economic data is available.
• However, data releases and comments from central bankers scheduled for this week could be crucial in highlighting potential risks associated with the plans announced this week.

JOBS REPORT ESTIMATES

Source: TradingEconomics

GOLD FUTURES

Gold futures are still trading near the highs. This strong rally could disappoint some short-term traders (dip buyers) waiting for a pullback that isn’t happening.

Despite this, we believe gold’s momentum is positive, and options offer a way to capitalize on further gains.

Source: TradingView

CRUDE OIL FUTURES

OPEC+’s monitoring committee, the JMMC, meets on April 3rd to assess market conditions, but no policy changes are anticipated.

Oil analysts expect the group to postpone adjustments until their official June meeting.

However, OPEC+ has a history of making surprise decisions outside of scheduled meetings.

Additionally, Russia’s recent reported production cuts suggest adherence to their OPEC+ commitments. The decision to delay adjustments likely reflects forecasts of a potential oil shortage later in 2024.

GOLDMAN’S 4 SCENARIOS FOR STOCKS

Goldman Sachs economist David Kostin highlights a four-scenario forecast for the S&P 500.

One scenario sees the S&P 500 rallying to 6000, and another calls for a drop to 4500.

Upside scenarios:

• ‘Catch up’ scenario if rates move lower, and the economy stays strong;
• A mega-cap exceptionalism scenario if secular growth trends prove to be even more robust than markets are currently forecasting.

Downside scenarios:

• ‘Catch-down’ scenario if sales growth estimates fall short for mega-cap Tech.
• Recession fears scenario if such fears re-emerge.

CRYPTO

Goldman Sachs sees a resurgence in crypto-related products from its hedge fund clients, particularly following the launch of spot Bitcoin ETFs in the United States.

“Many of our largest clients are active or exploring getting active in the space,” Max Minton, Goldman’s Asia Pacific Head of Digital Assets, told Bloomberg. Interest remains primarily in bitcoin-related products, but this could shift with potential U.S. approval of spot Ethereum ETFs, Minton added.

Goldman Sachs, which launched a crypto desk in 2021, is also exploring investments in crypto bankruptcy claims, indicating its broader interest in the sector’s opportunities.

asset class performance sheet

These performance charts track the daily, weekly, monthly, and yearly changes of various asset classes, including some of the most popular and liquid markets available to traders.

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