Daily Price Outlook
S&P 500 Index (SPX) increased by 0.33% at 4,151.32. The major stock index rose on Tuesday as China's economy showed a shorter-than-anticipated rebound from the severe pandemic lockdowns that caused a significant slowdown last year.
China Exceeds GDP Forecasts
The dollar fell after gaining overnight after upbeat US economic statistics supported predictions that the Federal Reserve will raise interest rates again in May, while China's economic recovery strengthened in the first quarter.
After increasing 0.5% overnight, the dollar index, which compares the dollar to six major competitors, decreased by 0.07% to 102.03. Meanwhile, the US 10-Year Bond Yield held steady at 3.591%.
Moreover, figures released on Tuesday revealed that China's gross domestic product (GDP) increased by 4.5% over the same period last year.
Analysts predicted a 4% growth as the end of COVID-19 limits pulled the world's second-largest economy out of a downturn. Consequently, it contributed to an increase in the major stock index, SPX.
Focusing on Corporate Earnings
Markets are monitoring the state of corporate profits and economies after major banks reported good first-quarter earnings last week. Despite worries about inflation, rising interest rates, and an approaching recession, the earnings season has started resilient with some of the most significant performances in over a decade.
M&T Bank Corp. surpassed Wall Street expectations for first-quarter earnings on Monday as a result of the US Federal Reserve's accelerated rate rises to control excessive inflation. Stock in MTB increased 7.8% to 125.66. Most bank stocks had an upbeat day.
Moreover, according to statistics from Bank of America, 30 firms generated results that were 90% over forecasts. Although there are still some concerns in the market, it seems to have escaped a big jolt to financial confidence.
At the end of the previous week, the four big banks all released profit results that surpassed Wall Street estimates. Several experts still believe regional banks will report a challenging quarter, so this week will demonstrate whether the theory is correct.
On Monday morning, the local M&T Bank (MBT) revealed earnings that were better than expected. The Western Alliance Bancorp (WAL) report from Tuesday, one of the institutions that collapsed with First Republic Bank (FRC) in March, might determine how regional banks behave for the rest of the week.
On the tech front, Netflix is anticipated to release financial results on Tuesday, with GAAP earnings per share (EPS) of $2.86 on sales of $8.18 billion. Wall Street predicts Tesla will report GAAP EPS of $0.75 on sales of $23.38 billion on Wednesday.
As traders reviewed the most recent round of corporate earnings data looking for indicators of the state of business in the US, the S&P 500 increased.
Daily Technical Levels:
Pivot Point: 4138
S&P500 – Technical Outlook
The S&P 500 is currently showing positive momentum above 4,100 and has strong support at 4,030, but may face resistance at 4,175 due to a double-top pattern. If the index breaks past this level, it may move towards the next resistance at 4,170. However, if it falls below 4,040, significant selling pressure could lead to a decline towards the 3,920 and 3,840 levels.
Technical indicators such as MACD and RSI suggest a strong bullish trend. Investors are advised to monitor the 4,040 level closely, as a candle closing above it may indicate an upward trend for the SPX today.
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