S&P500 (SPX) Price Analysis – Nov 15, 2024
Daily Price Outlook
Global market sentiment has been under bearish pressure, reflected in the bearish performance of the S&P 500 index, which recently dropped to around the 5,942 level.
This downward trend can be largely attributed to Federal Reserve Chairman Jerome Powell signaling a more cautious approach to future interest rate cuts.
Moreover, the mixed economic data from China and a contraction in the UK economy in September have added to the uncertainty.
Markets are now closely watching the upcoming US October Retail Sales data, scheduled for release on Friday, as well as any further comments from Federal Reserve officials for direction.
Fed's Cautious Stance and Inflation Data Weigh on S&P 500 Index Sentiment
On the US front, Federal Reserve Chair Jerome Powell signaled no urgency to cut interest rates further, citing uncertainties around President-elect Donald Trump’s upcoming policies. Powell stated it’s “too early to reach judgments” as the impact of Trump’s proposed tariffs and immigration crackdowns, which could drive inflation, remains unclear.
Earlier this month, the Fed lowered interest rates by 25 basis points to 4.50%-4.75%, the second cut in a row, but Powell’s cautious tone has cooled expectations for another cut. Rate futures now show a 60% chance of a cut next month, down from 80% earlier this week.
Recent inflation data supports the Fed’s careful stance. The Producer Price Index (PPI) rose 2.4% year-over-year in October, up from 1.9% in September, while Core PPI increased 3.1%.
Consumer Price Index (CPI) data showed a 2.6% annual rise, with core inflation at 3.3%, matching forecasts. These figures suggest inflationary pressures are steady, aligning with Powell’s measured approach.
Therefore, the Fed's cautious stance and mixed inflation data reduce expectations for aggressive rate cuts, limiting market optimism. This uncertainty, along with inflation concerns, weigh on investor sentiment, contributing to continued pressure on the S&P 500 index.
UK Economic Contraction Adds Pressure on S&P 500 Index Sentiment
Another factor that has been weighing on the S&P 500 index is the unexpected contraction in the UK economy in September. The country’s GDP fell by 0.1% in September, and while the economy grew by 0.1% in the third quarter, this is a slowdown from the 0.5% growth seen in the second quarter. This is a setback for the new Labour government, which is focused on boosting economic growth in the UK.
Chancellor Rachel Reeves announced a budget with plans for big spending, tax hikes, and more borrowing to support growth. She expressed disappointment with the latest GDP figures, saying improving growth is her main goal.
The Bank of England also lowered interest rates earlier this month by 0.25% and reduced its 2024 growth forecast to 1% from 1.25%. These economic challenges and slower growth are adding to uncertainty in the global market, affecting investor confidence.
Mixed Economic Data from China Weighs on S&P 500 Index Sentiment
On the China front, recent economic data has shown mixed results, impacting global markets, including the S&P 500 index. Industrial production grew by 5.3% year-on-year in October, slightly below expectations of 5.5% and slower than the previous month’s 5.4%.
This weaker industrial output highlights the challenges facing China’s manufacturing sector, which continues to struggle with slow domestic demand and low spending.
On a more positive note, retail sales rose by 4.8% in October, much stronger than the expected 3.8% and higher than the previous month’s 3.2%. This increase was partly driven by the Golden Week holiday and some improvement in private spending, supported by China’s recent stimulus measures.
However, concerns remain over the property sector, where investment dropped 10.3% from January to October, and home prices fell 5.9% in October, marking the 16th straight month of decline. These mixed signals from China contribute to uncertainty, influencing market sentiment and the S&P 500 index.
S&P 500 – Technical Analysis
The SPX index is trading at 5949.16, down 0.61%, and currently below the pivot point of 5987.18, indicating a slight bearish tone in the market. With the RSI at 48, the momentum is mildly bearish, as the indicator remains below the neutral 50 mark, yet close enough to suggest potential for a rebound if buying pressure emerges.
Immediate resistance sits at 6017.29, followed by 6056.54 and a more distant level at 6103.34. Breaking above the pivot point and first resistance would be essential for reversing the current bearish sentiment.
On the downside, immediate support lies at 5924.15, and a breach here could open the path toward the next support levels at 5877.15 and 5838.15. Notably, the 50-day EMA is positioned at 5883.23, aligning with the lower support level, which may serve as a key point for traders to monitor.
If the index remains below the pivot and fails to surpass the 50-day EMA, bearish sentiment could dominate, pushing the SPX toward deeper support.
The recommended entry strategy suggests selling below 5988, targeting a take-profit level of 5928, capitalizing on anticipated downside momentum.
However, a stop-loss at 6033 is advised to mitigate risk should the index break above the pivot, potentially reversing the trend. The overall outlook remains cautiously bearish unless SPX can decisively reclaim the pivot and break above resistance.
Related News
- Price Analysis – Nov 15, 2024
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.