Daily Price Outlook
The S&P 500 futures are experiencing modest declines despite a positive close on Wall Street. This comes as investors in Asia remain optimistic about a potential extension of the US debt ceiling. The upbeat sentiment is also supported by several factors, including positive economic developments in Australia and New Zealand, as well as encouraging trade news from China.
Asian Markets Gain Momentum: Australia's Employment Data and Japanese Nikkei 225 Reach New Highs
In the Asian market, the MSCI's index of Asia-Pacific shares, excluding Japan, has risen by 0.70%. Meanwhile, Japan's Nikkei 225 has recorded intraday gains of 1.60%, reaching its highest levels since late 2021.
However, the positive performance can be attributed to Australia's surprising employment change figures for April, which showed a decline of 4.3K jobs compared to the expected increase of 25K. Additionally, the unemployment rate in Australia rose to 3.7% from the previous 3.5%.
These developments have dampened the hawkish sentiment surrounding the Reserve Bank of Australia (RBA) and helped maintain firmness in Aussie shares. New Zealand has also contributed to the positive mood with its no-frills budget, leading to a nearly 1.20% increase in the NZX50 index.
Timber Imports Boost Chinese, Hong Kong, and Taiwanese Stocks, Doubts Linger on Budget Solution
China is considering resuming timber imports from Australia, leading to strong stock performance in China, Hong Kong, and Taiwan. However, Indonesia's stock market is not following this trend, while Indian equities are slightly positive.
US President Joe Biden and House Speaker Kevin McCarthy's comments have reassured markets about avoiding a catastrophic default. There are doubts about Biden's ability to reach a budget solution by the end of the week, which could impact positive sentiment.
Concerns about US economic data and cautious consumer spending have affected companies like Target and Home Depot. The S&P 500 is experiencing small losses but remains cautiously optimistic as investors watch for further developments.
SPX S&P500 – Technical Outlook
On Thursday, the S&P 500, a leading stock market index, is exhibiting a slight bullish bias, trading around the 4150 level. It has recently surpassed a significant resistance level at 4149, which had been acting as a major hurdle.
Moreover, the formation of a bullish candlestick pattern on the four-hour timeframe indicates a strong bullish sentiment among investors regarding the S&P 500.
Therefore, if the candles continue to close above the 4140 level, it suggests a potential continuation of the upward trend towards the 4150 level, with the next target likely to be around the resistance levels of 4180 or 4195.
Additionally, the 50-day exponential moving average is providing support to the current trend by acting as a support zone around the 4130 level. Furthermore, the RSI and MACD indicators are holding in a bullish zone, further supporting the likelihood of a continued upward trend.
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