S&P500 (SPX) Price Analysis – March 24, 2023
Daily Price Outlook
The S&P 500 (SPX) is currently trading 0.30% higher at 3,948.72, as the market considers a Fed policy pause leading to an increase in stocks. US Treasury Secretary Janet Yellen attempted to reassure worried investors that deposits in US banks were secure and pledged that policymakers would have more capacity to deal with any crisis.
Yellen reaffirmed her intention on Thursday to take more measures to protect bank deposits if necessary, addressing one of the investors' concerns. However, the decline in bank performance followed Yellen's statement that the government would be prepared to help support regional banks.
On Friday, First Republic Bank started to fluctuate again, lowering expectations for the overall banking situation as attention shifted to the condition of local banks. As regional banks came back under pressure, the S&P 500 saw a reduction in gains.
Fed to Pause Rate Hikes
Jerome Powell, the head of the Federal Reserve, has previously stated that the ongoing difficulties in the banking sector may have an impact on the US economy and reduce the need for rate hikes, even though inflation remains an issue. The markets reacted positively and sentiment improved after the Fed hinted at a pause in rate hikes following its quarter-point rate increase on Wednesday while still aiming to combat inflation.
The benchmark 10-year Treasury note yield dropped to 3.399%, in line with more conservative rate projections, after rising in tandem with traders' estimates of the Fed fund rates.
In addition, the Dollar Index (DXY) gained momentum as initial unemployment claims for the week ending March 18 came in at 191k, which was below the predicted 197k and the previous week's 192k. The DXY is currently trading slightly higher at 102.70.
Investors gained confidence that the Federal Reserve may hold off on raising interest rates to compensate for the financial market upheaval, which led to a surge in the S&P 500 index.
Top Gainers in Stocks Market
The markets rebounded and closed higher on Thursday, recovering some of the losses from the previous day. The gainers on the S&P 500 were led by tech firms, including Netflix (NFLX), which experienced gains for the first time since October. This was due to a YipitData report that stated the company's gross adds in Canada had improved, causing its shares to increase by 9%.
Accenture Plc (ACN) announced that it would eliminate around 2.5% of its staff or 19,000 positions. More than half of the jobs to be lost would be in non-billable corporate services. This news caused Accenture's share price to increase by more than 7%.
Regeneron Pharmaceuticals Inc. (REGN) saw gains of more than 6% following promising findings from a test of its asthma medicine Dupixent on lung illness.
S&P500 Intraday Technical Levels
Support Resistance
3902 4006
3868 4074
3799 4109
Pivot Point: 3971
S&P500 – Technical Outlook
On the technical front, the SPX is currently consolidating in a narrow trading range between the $3,900 and $4,000 levels. A breakout from this range could have a significant impact on the price action of the S&P 500. If the breakout is bullish and exceeds the $4,000 level, it may expose the SPX toward the $4,080 or $4,170 levels.
Currently, support remains around the $3,920 level. On the downside, a bearish breakout below this level could create more selling pressure, leading to a potential drop toward the $3,840 or $3,765 mark. The RSI and MACD indicators support a buying trend, but failure to stay above 50 or 0 could trigger a downward movement.
Investors will be focused on a series of manufacturing and services PMI figures on Friday, which could determine further price action in the market.
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