Weekly Market Outlook: Navigating the September Crosscurrents

Welcome to your weekly market outlook. As we head into the second week of September, the market is at a fascinating juncture. We've seen a surprising defiance of the historical "September slump," with the S&P 500 showing remarkable resilience. But don't get too comfortable – the week ahead is packed with catalysts that could easily shift the narrative.

This week, it's all about inflation. The upcoming CPI and PPI data will be the market's main event, and the results will have significant implications for the Federal Reserve's next move. Will we see a continuation of the recent disinflationary trend, or will sticky inflation throw a wrench in the works? The answer will likely determine the market's direction for the rest of the month.

Beyond the headline inflation numbers, we'll also be keeping a close eye on the technology and financial sectors. Both have been on a tear lately, but for different reasons. Tech continues to be fueled by the AI narrative, while financials are riding the wave of expectations for rate cuts. We'll delve into these trends in depth to identify potential opportunities and risks.

In this week's newsletter, we'll break down everything you need to know to navigate the week ahead. We'll cover key economic data, major earnings reports, and market-moving trends in the VIX, gold, oil, the FTSE 100, and GBP/USD. I'll also be sharing some specific trading ideas that I'm currently examining.

So, let's get to it. Here's your guide to the week ahead.

The Big Picture: A Market at a Crossroads

As I see it, the market is currently caught between two powerful forces: the tailwind of potential Fed rate cuts and the headwind of a slowing global economy. The recent jobs data was a perfect example of this dynamic. The weaker-than-expected numbers fueled hopes for a more dovish Fed, but they also raised concerns about the health of the labour market.

This is why the upcoming inflation data is so critical. If we see a significant drop in CPI, it will give the Fed the green light to cut rates, which would be a major catalyst for the market. However, if inflation remains stubbornly high, it will put the Fed in a difficult position and could lead to a market pullback.

From a technical perspective, the S&P 500 is currently trading just below its all-time highs. This is a critical level, and a breakout above it could signal the start of a new leg up. However, a failure to break out could lead to a period of consolidation or even a correction.

Here's a look at the key market indicators I'm watching this week:

VIX: The Fear Gauge is Subdued, But For How Long?

The VIX, often referred to as the "fear gauge," is currently trading at relatively low levels, in the 15-17 range. This suggests that there is not a lot of fear in the market right now. However, we did see a spike in the VIX earlier last week, which serves as a reminder that volatility can increase at any time.

I'll be watching the VIX closely this week, especially around the CPI release. A sharp move higher in the VIX could be a sign that the market is starting to get nervous.

Gold: The Safe Haven is Shining Bright

Gold has been on an absolute tear lately, breaking out to new all-time highs above $3,600 per ounce. This is a classic sign that investors are seeking safety amid the current economic uncertainty. The combination of a weaker US dollar and expectations of Fed rate cuts has created a perfect storm for gold.

I believe that gold will remain a popular investment as long as these conditions persist. I'm looking for a potential move towards the $3,700 level in the coming weeks.

Oil: The Black Gold is Losing its Luster

In contrast to gold, oil has been struggling lately. Both WTI and Brent crude have been trending lower, with WTI currently trading around $62 per barrel and Brent around $66. This weakness in oil prices reflects concerns about a slowing global economy.

I'm cautious on oil at these levels. While we could see a short-term bounce, I believe that the path of least resistance is lower. I'll be watching for a potential break below the $60 level in WTI.

FTSE 100: The UK Market is Outperforming

The FTSE 100 has been a standout performer this year, up over 13% year-to-date. This is a significant outperformance compared to the S&P 500, and it's a trend that I believe could continue. The UK market is benefiting from a weaker pound, which makes its exports more competitive.

I'm bullish on the FTSE 100 and I'm looking for a potential move towards the 9,500 level in the coming months.

GBP/USD: The Pound is Showing Signs of Life

The British pound has been showing signs of life lately, rallying back above the 1.35 level against the US dollar. This strength in the pound is being driven by a combination of factors, including a more hawkish Bank of England and a weaker US dollar.

I believe that the pound has further to run. I'm looking for a potential move towards the 1.36 level in the coming weeks.

The Week Ahead: Key Economic Events and Earnings

This week is all about inflation. The CPI and PPI data will be the main events, but there are a few other releases that are worth keeping an eye on.

Economic Calendar

•Tuesday, September 10, 8:30 AM ET: Producer Price Index (PPI) for August 2025

•Thursday, September 11, 8:30 AM ET: Consumer Price Index (CPI) for August 2025

Major Earnings Reports

•Tuesday, September 9 (After Market Close): Oracle (ORCL), GameStop (GME), Synopsys (SNPS)

I'll be watching the Oracle earnings report very closely. The company's results will give us a good read on the health of the enterprise software market and the demand for AI-related products.

Trading Ideas for the Week

Here are a few trading ideas that I'm looking at for the week ahead. As always, these are not recommendations to buy or sell, but rather ideas to watch.

Long Gold (XAU/USD)

As I mentioned earlier, I'm bullish on gold. I'm looking for a potential move towards the $3,700 level in the coming weeks. I would be a buyer on any dips, with a stop-loss below the $3,500 level.

•Entry: Buy on dips, ideally in the $3,550-$3,600 range.

•Target: $3,700

•Stop-loss: Below $3,500

Short Oil (WTI)

I'm bearish on oil and I'm looking for a potential break below the $60 level in WTI. I would be a seller on any rallies, with a stop-loss above the $65 level.

•Entry: Sell on rallies, ideally in the $63-$64 range.

•Target: $60

•Stop-loss: Above $65

Long FTSE 100 (UKX)

I'm bullish on the FTSE 100 and I'm looking for a potential move towards the 9,500 level in the coming months. I would be a buyer on any dips, with a stop-loss below the 9,000 level.

•Entry: Buy on dips, ideally in the 9,100-9,200 range.

•Target: 9,500

•Stop-loss: Below 9,000

Long GBP/USD

I'm bullish on the pound and I'm looking for a potential move towards the 1.36 level in the coming weeks. I would be a buyer on any dips, with a stop-loss below the 1.35 level.

•Entry: Buy on dips, ideally in the 1.3450 range.

•Target: 1.36-1.365

•Stop-loss: Below 1.345

Final Thoughts

This is a pivotal week for the market. The inflation data will be the key driver, and it could set the tone for the rest of the month. I'll be watching the market closely and I'll be ready to react to any new developments.

I hope you found this week's newsletter helpful. As always, please feel free to reach out with any questions or comments.

Disclaimer: This newsletter is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.