S&P500 (SPX) Price Analysis – April 07, 2023
Daily Price Outlook
The S&P 500 (SPX) is trading at 4,105.02, up by 0.36% in 24 hours. The S&P 500 increased after reducing losses, dismissing economic worries amid additional signs that the labor market is cooling ahead of the crucial monthly employment data expected on Friday.
Investors awaiting upcoming jobs data
According to economic figures coming out of the US that indicate slowing economic development, the services sector expanded at a more moderate rate in March as demand cooled, while US job openings fell to their lowest level in almost two years in February.
Additionally, initial applications for unemployment benefits decreased by 18,000 from 246,000 in the week ended April 1, surpassing experts' projections of 200,000 claims, fueling concerns that the labor market is cooling.
After this data, the US Dollar Index (DXY), currently trading at 101.95, is up 0.13%, holding onto its daily recovery gains. The US dollar increased slightly but is still close to two-month lows as a slowing economy suggests a pause in the US Federal Reserve's cycle of rate hikes.
Alphabet shares rose on Thursday as investors, concerned about a weakening economy, turned their attention to upcoming jobs data. It helped major US stock indexes conclude the day higher.
Investor attention is now on the more comprehensive data on non-farm payrolls, anticipated to have grown by 239,000 in March, down from the 311,000 jobs gained in the previous month. The report is due later in the day, which is Good Friday in the US, and the stock market is closed.
Stock News
A US court rejected the theater operator's appeal to withdraw a status quo order required for its proposal to convert preferred shares into common shares, sending AMC Entertainment (AMC) Holdings Inc. up 21%.
Investors expressed worries about a probable economic slump as Caterpillar (CAT), seen as the gauge for the industrial sector, dropped more than 2%, increasing its loss over the last three days to 9%.
In terms of earnings, Levi Strauss & Co. (LEVI) revealed fourth-quarter figures that beat Wall Street forecasts. However, the apparel company repeated its guidance among concerns over the outlook for the economy. Following the garment maker's announcement of a decline in quarterly earnings, the stocks fell 16%.
Daily Technical Levels:
S&P500 Intraday Technical Levels
Support Resistance
4075 4103
4060 4115
4048 4130
Pivot Point: 4088
S&P500 – Technical Outlook
The S&P 500 is currently experiencing strong positive momentum above 4,100, and has solid support at 4,030. However, there is a significant obstacle at 4,175 due to a double-top pattern which may cause resistance.
If the index manages to break past this level, it could move toward the next resistance at 4,170. Conversely, if the SPX falls below 4,040, there could be considerable selling pressure, leading to a decline towards the 3,920 and 3,840 levels.
Technical indicators, specifically MACD and RSI, both suggest a strong bullish trend. Investors are expected to focus on the 4,040 level, and if the candle closes above it, there is a good chance that the SPX will trend upwards today.
Related:
* EUR/USD Price Analysis – April 07, 2023
S&P500 (SPX) Price Analysis – March 30, 2023
Daily Price Outlook
The S&P 500 (SPX) is trading at 4,027.81, up 1.42% in the last 24 hours. The Micron-fueled spike in technology and new indications of lessening concerns in the banking industry pushed the index higher.
Micron-led Rally in Tech
Micron Technology Inc (MU) reported results for the second quarter of fiscal 2023, which ended on March 2, 2023, on Tuesday. According to a statement released by the company on Tuesday, sales might reach $3.9 billion in the third quarter of this fiscal year.
This contrasts with the $3.75 billion average expert projection. Moreover, the corporation announced additional layoffs. Micron climbed as the projection surprise encouraged optimism that the worst was over.
After the chipmaker's better-than-anticipated sales outlook and encouraging remarks about a bottom in chip demand offset quarterly results that fell short of forecasts, the company's shares increased by over 7%, driving chip stocks and the broader tech sector higher.
Furthermore, interest in other semiconductor companies was raised, with Intel Corporation (INTC), Lam Research Corp (LRCX), and Marvell Technologies (MRVL) all gaining strength.
The risk sentiment helped financial and technology firms. As a result, the S&P 500 Index increased as optimistic outlooks from businesses like Micron Technology and others eased some concerns about the economic situation.
Banking Concerns Eased
The selling of assets by Silicon Valley Bank (SVB) on Monday helped stock investors' risk appetites and reduced market tensions. Furthermore, market concerns regarding pressure in the US banking sector have subsided due to significant actions taken by US authorities and the Fed to strengthen the financial system and restore trust.
Shares of SVB Financial Group (SIVBQ) are trading at 0.97, up 142.50% in the last 24 hours. Signature Bank (SBNY) shares increased 84.62% to 0.24. After investors gained hope from the banking sector's increased stability, the S&P 500 Index rose.
Fed to Hike Rates
As uncertainty persisted and bond investors assessed the effect of rising interest rates on economic development, the yield on US 10-Year Bonds rose modestly to 3.573%. The dollar also rebounded as bets that the Federal Reserve would keep raising interest rates increased once more. At 102.75, the dollar index (DXY) increased by 0.11%.
Looking ahead on Friday, experts predict the core PCE to rise by 0.4% m-o-m in February after increasing by 0.6% at the beginning of the year. The annual rate will remain at 4.7%, indicating that the underlying trend hasn't moved much.
A positive surprise may cause investors to increase their bets on a 25bp FOMC hike at the May meeting, even if this option has been discounted and may not cause much volatility. It might cause the S&P 500 to decline.
S&P500 Intraday Technical Levels
Support Resistance
3955 3983
3940 3995
3928 4011
Pivot Point: 3967
S&P500 – Technical Outlook
At present, the S&P 500 is trading at 4,025 with a solid support level at 3,920. However, there may be considerable resistance due to the double-top pattern at 4,039. If it surpasses this level, the SPX price might be propelled towards the next resistance level of 4,160.
Conversely, if the SPX falls below 3,920, it could encounter intense selling pressure and potentially decline to the 3,840 and 3,750 levels. Technical indicators like MACD and RSI are both within the buying zone, signifying a strong bullish inclination.
Investors will likely concentrate on the 3,900 level, and if the candle closes above it, the SPX price could experience an upward trend today.
Related:
* EUR/USD Price Analysis – March 30, 2023
S&P500 (SPX) Price Analysis – March 27, 2023
Daily Price Outlook
The S&P 500 (SPX) Index is trading at 3,970.99, up by 0.56% in 24 hours. Despite ongoing financial turbulence, the stock index is rising as Fed officials reassured investors that the US banking sector would maintain stability.
US Officials Reassure Investors
Deutsche Bank, a German lender, experienced a drop in shares on Friday as credit default swaps increased, raising concerns about the sustainability of European banks. A significant rise in Deutsche Bank's credit default swaps has reignited market worries.
European Central Bank President Christine Lagarde attempted to alleviate concerns about the stability of the European banking industry, emphasizing that eurozone banks are resilient with high liquidity and capital levels.
Conversely, Neel Kashkari, President of the Minneapolis Fed, mentioned on Sunday that the current stress in the banking sector and the possibility of a follow-up credit crunch are pushing the US closer to a recession. The Fed will face a difficult decision regarding interest rate hikes if recession fears become widespread.
St. Louis Fed President James Bullard believes the Fed will likely need to raise interest rates more than initially expected, given the reduced pressure on the banking sector due to the US government's prompt response and the continued well-being of the economy and inflation.
Bullard's comments alleviated risks that excessively high rates pose to the banking sector. It also emphasized the Fed's focus on bringing inflation to its target level rather than worrying about further bank runs.
Fed policymakers expressed confidence in the stability and resilience of the US financial system while emphasizing that inflation remains a significant issue. This helped boost the S&P 500 Index.
Mega Cap Stocks Experience Gains
Amid market uncertainty, investors are buying stock in large American corporations like Apple, Microsoft, Alphabet, Amazon, and Nvidia, which have typically driven the market upward.
Since March 8, the stocks of these companies have risen between 4.5% and 12%.
The shift in investment is attributed to factors such as strong balance sheets, healthy profit margins, and business models expected to perform better in the event of a recession.
However, investing in mega-cap companies presents challenges, as indexes like the S&P 500 are influenced by a narrower group of firms due to their expanding market cap. If investors quickly withdraw from leading technology and growth companies, this could cause instability in broader markets.
Additionally, Activision Blizzard topped the list of top gainers. The UK's Competition and Markets Authority (CMA) stated that new data showed "the acquisition would not result in a material reduction of competition in console gaming in the UK," resulting in Activision Blizzard's (ATVI) shares increasing by over 5%.
S&P500 Intraday Technical Levels
Support Resistance
3909 3998
3870 4047
3821 4087
Pivot Point: 3958
S&P500 – Technical Outlook
The S&P 500 is trading at the 3,970 level and is receiving immediate support at the 3,920 level. On the upside, the double-top pattern is expected to present significant resistance at 4,039, and a bullish cross above this specific level can potentially lead the SPX price toward the next resistance level of 4,160.
Conversely, if the SPX breaks below 3,920, there is likely to be a strong wave of further selling pressure until it reaches the 3,840 and 3,750 levels. Regarding leading technical indicators such as MACD and RSI, both indicators are currently in the buying zone, suggesting that the bullish bias remains strong for Monday.
As a result, most investors will likely focus on the 3,900 level, as a candle close above this specific level has the potential to drive an upward trend in the SPX price today.
Related:
* EUR/USD Price Analysis – March 27, 2023
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.
Related:
* GOLD Price Analysis – March 24, 2023
S&P500 (SPX) Price Analysis – March 22, 2023
Daily Price Outlook
The S&P 500 (SPX) is currently trading 1.30% higher at 4,002.9. The index is increasing as investors shift their focus towards the Fed's policy meeting, and the volatility in the bank sector decreases ahead of the event.
Banking Fears Cool Down
The stock market experienced a cautious rebound on Wednesday as fears regarding the banking industry eased ahead of the Federal Reserve's critical policy meeting. Bank shares rose overnight, indicating that US Treasury Secretary Janet Yellen's efforts to ease tensions were successful.
Yellen stated that the Federal Reserve's new Bank Term Funding facility and discount window loans were providing the banking industry with liquidity, which helped alleviate worries about liquidity.
Furthermore, the stock of First Republic Bank (FRC) rose by 29.47% to $15.77. Yellen's promise of further support for banks fueled an increase in the S&P 500, particularly in bank stocks, especially those owned by First Republic.
FOMC Meeting Ahead
At the current two-day monetary policy meeting, members of the FOMC will assess economic forecasts, and they are expected to raise the Fed funds target rate by another 25 basis points as part of their continuous efforts to control inflation.
However, market experts anticipate that more attention will be paid to Chairman Jerome Powell's remarks about the economy, inflation, and how he would handle worries about recent banking issues, rather than the rate rise itself.
In addition to this, the Fed's predictions for the direction of future interest rate rises will also be of interest to investors, even though markets are already pricing in reductions later this year.
The gains made by the S&P 500 Index coincide with the start of the Fed meeting, and many anticipate that it will result in a quarter-point rate rise on Wednesday.
Most Active Stocks
Major US stock indices experienced an increase on Wednesday, with the energy and banking sectors showing particularly strong growth. Following discussions between JPMorgan CEO Jamie Dimon and other major banks regarding investment in First Republic Bank, its shares increased by 29.47%.
Several regional banks, including U.S. Bancorp (USB), Comerica Inc (CMA), and KeyCorp (KEY), also saw significant price increases, with the latter experiencing a gain of over 9%. Furthermore, according to data on automobile registrations, Tesla Inc. was poised to report one of its strongest quarters in China, contributing to a 7.82% increase in the company's stock price.
S&P500 Intraday Technical Levels
Support Resistance
3927 3966
3902 3981
3887 4006
Pivot Point: 3942
S&P500 – Technical Outlook
The S&P 500 (SPX) has been steadily rising, surpassing the $3,970 mark and heading towards the next resistance level of $4,085. On the lower end, the immediate support level for SPX is at $3,850, and breaking below this level may result in further selling towards the $3,765 mark.
Despite this, leading technical indicators such as RSI and MACD are in a buying zone, indicating a bullish bias among investors.
A bullish breakout above the $4,085 level could create additional buying opportunities towards $4,160 or even higher, signaling positive market sentiment.
Related:
* GOLD Price Analysis – March 22, 2023
S&P500 (SPX) Price Analysis – March 15, 2023
Daily Price Outlook
The S&P500 has risen 1.65% on the last day to trade at 3,919.29. US stocks recovered as anticipation of the extent of the rate rise at the Federal Reserve's policy meeting next week was muted by inflation data that was mostly on target and easing concerns about the spread in the banking sector.
US CPI Eases
On Tuesday, investors appeared to take hope in the fact that the risk of market spread from the Silicon Valley Bank crisis was reducing. However, the stability of the global banking industry under rising interest rates remained a focus.
Meanwhile, the CPI data from the US Labor Department revealed that consumer prices decreased in February, roughly in line with market forecasts, with both headline and core measures recording significant annual decreases.
The Consumer Price Index (CPI), which measures inflation in the US, decreased from 6.4% in January to 6% in February. The reading matched the expectations set by the market.
There is still a long way until inflation reaches the central bank's 2% target on an annual average. However, the chances that the Federal Reserve would adopt a 25 basis-point boost to its benchmark interest rate at the end of its two-day policy meeting on March 22 has grown in response to indications of economic softening and the regional banking crisis.
The US dollar fell as traders doubted the possibility of another rate increase by the Fed later this month in light of the US financial crisis and easing inflation. DXY is now trading down at 103.54. Moreover, the US 10-Year Treasury yield increased to trade at 3.666%.
After several days of risk-off instability, the S&P 500 finished significantly higher as bank fears decreased and inflation cooled.
Insulet was selected to take SVB's spot on the S&P 500 index.
The parent firm, SVB Financial Group, is no longer eligible for listing on the S&P 500 after authorities interfered and shut down Silicon Valley Bank. As a result, the bank dropped from the index before the markets opened on Wednesday, and Insulet took its place.
Insulet's inclusion in the S&P 500 comes just a few weeks after the company announced its highest-ever annual revenues, beating last year's record. The manufacturer of diabetes technology made $1.3 billion overall in 2022, an increase of more than 18% from the previous year.
The stock price rose sharply after news that Insulet would replace SVB on the S&P 500. Moreover, the S&P 500 performed better than anticipated.
S&P500 Intraday Technical Levels
Support Resistance
3808.07 3904.26
3760.37 3952.75
3711.88 4000.45
Pivot Point: 3856.56
S&P500 – Technical Outlook
The S&P 500 (SPX) has encountered a hurdle near the $4,060 level, which is reinforced by a 50% Fibonacci retracement mark. As a result, the index has fallen once again from a technical standpoint. Closing candles below this level are indicating a sell zone for SPX, and the "three black crows" pattern in the 4-hour timeframe is contributing to the bearish sentiment among investors.
Currently, the SPX's immediate resistance level is at $4,095, which is supported by a 61.8% Fibonacci correction level on the upside. A bullish breakout above the $4,035 level could lead to further gains towards the $4,200 mark. However, if the support level at $3,930 is broken, the SPX may drop towards the next support level at $3,880.
S&P500 (SPX) Price Analysis – March 13, 2023
Daily Price Outlook
The S&P500 is trading at 3,861.59, down by 1.45% in 24 hours. Stock markets have fallen due to stronger-than-expected NFP data, and worries about bank contagion after the failure of SVB.
The collapse of Silicon Valley Bank
Silicon Valley Bank (SVB) Financial Group's surprise failure and FDIC seizure on Friday motivated a fast Fed meeting on Monday. The US authorities responded to limit the consequences of the unexpected collapse.
The Federal Reserve acted quickly to loosen the limits on bank borrowing. Furthermore, the White House promised to pay any withdrawals for SVB depositors.
The Fed and the FDIC are making great efforts to ring-fence SVB and stop contagion, but this worry is disturbing the market. Investors also believe that the Fed is far less likely to raise interest rates since doing so could bring down any other banks. According to the Fed Rate Monitor Tool, more traders anticipate a 25 basis point increase in interest rates from the Fed this month versus a 50 basis point increase.
Although depositors are likely to withdraw their funds from the bank, there are concerns about contagion. As a result, global markets closed the week in a sharp decline, with the S&P 500 Index closing at its lowest level in more than two months.
US NFP report
The US non-farm payroll statistics released on Friday showed 311k new employment opportunities occurred last month versus the 224k anticipated. Moreover, the unemployment rate grew from 3.4% to 3.6%, while average hourly wages only increased by 0.2%.
Overall, this news would have probably been a bit optimistic for the US Dollar if not for the worry of bank contagion.
The outcome was a sharp decline in the dollar relative to a basket of currencies, with DXY trading at 0.76% and down at 103.78. The current price of the US 10-Year Bond Yield is 3.670%, down by 0.68%.
Looking ahead, traders are looking forward to the release of the US consumer price index on Tuesday.
S&P500 Intraday Technical Levels
Support Resistance
3879 3988
3839 4057
3770 4097
Pivot Point: 3948
S&P500 – Technical Outlook
The S&P 500 (SPX) has faced resistance near the $4,060 level, which is extended by a 50% Fibonacci retracement mark, causing the index to drop again from a technical perspective. Candles closing below this level are keeping SPX in a sell zone, and the "three black crows" pattern in the 4-hour timeframe adds to the bearish bias among investors.
The SPX's immediate resistance level is $4,095, supported by a 61.8% Fibonacci correction level on the upside. A bullish breakout above the $4,035 level may lead to further gains toward the $4,200 mark. However, in the event of a breakdown below the support level of $3,930, the SPX may drop toward the next support level at $3,880.
S&P500 (SPX) Price Analysis – March 9, 2023
Daily Price Outlook
The S&P500 is trading at 3,992.01, up 0.14% in the last 24 hours. The index gained ground as investors struggled to make sense of mixed statements made by Federal Reserve Chair Jerome Powell and US economic data ahead of upcoming labor and inflation reports.
The upcoming data is anticipated to influence the central bank's rate hike plan.
US Economy and Fed Rate Hikes
On his second day of testimony before Congress on Wednesday, Powell reiterated his message of potentially higher and quicker interest rate increases, which he had already stated on Tuesday. However, he hinted that the decision on the next rate hike would depend on the data released prior to the Fed's March meeting.
In addition, data released on Wednesday showed that US private payrolls rose more than expected in February, but this did little to ease concerns about the potential for higher interest rates.
Another report indicated that US JOLTS Job Openings decreased in January, but less than anticipated. Despite the decrease, the data suggested that the labor market remained tight, with job openings falling to 10.82 million. This has raised concerns that the Fed may continue its plan to raise interest rates for an extended period.
Traders continued to increase their bets on a 50 basis point interest rate hike by the US central bank later this month. CME Group's FedWatch tool indicated a nearly 80% chance of such a rise, up from roughly 70% on Tuesday.
The dollar remained stable for the day but fell from its three-month highs as Federal Reserve Chairman Jerome Powell provided no new insights during his second day of congressional testimony. The DXY dropped to 105.57 as investors awaited Friday's employment data. Meanwhile, the US 10-Year Treasury Yield increased to 3.997%.
S&P Sectors
Six out of the 11 major sectors of the S&P were down, with energy showing the largest decline at 1.3%. On the other hand, real estate saw the highest increase, rising by 0.96%.
Despite a general market downturn, airline stocks survived after the Justice Department filed a lawsuit to halt JetBlue's acquisition of Spirit Airlines. United Airlines saw a 3% increase, while American and Delta had gains of 1.5% and 1.6%, respectively.
Occidental Petroleum Corp. saw a 1.8% increase after Warren Buffett's Berkshire Hathaway Inc. raised its ownership to approximately 22.2% in the oil company.
However, Tesla Inc. fell by 3.3% after the U.S. auto safety agency announced a preliminary inquiry on 120,000 Model Y 2023 vehicles due to reports of steering wheels coming off while driving.
S&P500 Intraday Technical Levels
Support Resistance
3961 4031
3936 4075
3891 4101
Pivot Point: 4006
S&P500 – Technical Outlook
The S&P 500 (SPX) has faced resistance near the $4,060 level, which is extended by a 50% Fibonacci retracement mark, causing the index to drop again from a technical perspective. Candles closing below this level are keeping SPX in a sell zone, and the "three black crows" pattern in the 4-hour timeframe adds to the bearish bias among investors.
The SPX's immediate resistance level is $4,095, supported by a 61.8% Fibonacci correction level on the upside. A bullish breakout above the $4,035 level may lead to further gains toward the $4,200 mark. However, in the event of a breakdown below the support level of $3,930, the SPX may drop toward the next support level at $3,880.
S&P500 (SPX) Price Analysis – March 6, 2023
Daily Price Outlook
The S&P500 (SPX) is currently trading at $4,045.64, representing an increase of 1.61% in the past 24 hours. The surge in the S&P 500 was due to the decrease in US Treasury rates and investors' acceptance of the increasing possibility that the Federal Reserve will maintain its tight monetary policy until the end of the year.
Fed rate hikes speculations
The previous week's US statistics sparked concerns about the hawkish stance of the Federal Reserve (Fed). However, the Fed's semi-annual Monetary Policy Report released on Friday stated explicitly that the Fed funds rate target must continue to increase, with a commitment to bringing inflation back to 2%.
Investors will be watching the US employment data for February on Friday and Jerome Powell's testimony before Congress for any updates on the direction of interest rates.
Powell is scheduled to speak before Congress and provide the central bank's semi-annual report on monetary policy, speaking before the Senate on Tuesday and the House of Representatives on Wednesday.
Market participants will closely watch his comments for indications of whether a higher rate rise is being considered this month after recent US statistics indicated continuing inflation.
Traders expect the Fed to raise interest rates by another 25 basis points this month, with market pricing now indicating a higher probability of a rise than in the past. The dollar held steady on Monday at around 104.43 after facing severe losses the previous week. The US 10-Year Bond Yield fell by 0.68% to 3.936.
Corporate earning
Due to high inflation and the Federal Reserve's interest rate hikes, corporate America has experienced some sharp and disappointing earnings results. Almost 99% of S&P 500 companies have already released their Q4 earnings, and the results have been particularly disappointing for the tech sector.
IT companies had a dismal performance in the last quarter, with Apple reporting an unusual earnings miss, while Intel and Alphabet, the parent company of Google, underperformed forecasted earnings.
However, not all was negative, as energy firms generated record profits for another quarter, with Chevron, ConocoPhillips, Exxon, and Shell recording their most profitable years ever. Tesla also announced record revenue growth and exceeded profit expectations. Target and Walmart also outperformed forecasts as US consumers continued to spend.
On average, S&P 500 index business earnings last quarter were only slightly above analyst expectations by around 1.3%.
S&P500 Intraday Technical Levels
Support Resistance
3943 4005
3904 4029
3880 4068
Pivot Point: 3967
S&P500 – Technical Outlook
From a technical perspective, the S&P 500 (SPX) has rebounded from the support zone at the $3,930 level. The appearance of the "three white soldiers" pattern in the 4-hour timeframe increases the possibility of a bullish rebound.
On the upside, the SPX's immediate resistance level is at $4,095, supported by a 61.8% Fibonacci correction level. A bullish breakout of the $4,035 level may lead to further gains toward the $4,200 mark.
However, in the event of a breakdown below the support level of $3,930, the SPX may drop toward the next support level at $3,880.
S&P500 (SPX) Price Analysis – March 2, 2023
Daily Price Outlook
The S&P500 is currently trading at $3,951.04, representing a 0.47% decrease in the past 24 hours. The decline in the S&P 500 was driven by manufacturing data indicating that inflation may remain persistently high, along with an increase in Treasury rates and hawkish remarks from Federal Reserve policymakers, which reinforced a stringent policy stance.
Federal Reserve Officials Suggest Aggressive Hikes in Interest Rates
The latest PMI data from S&P Global indicates a grim outlook for US manufacturing companies. The manufacturing PMI for February came in at 47.7%, which was 0.3% points higher than January's figure of 47.4%.
Despite the data showing the slowest rate of decline in three months, the sector's health has deteriorated as producers of goods struggle.
The ISM survey showed that US manufacturing contracted in February, while raw material costs increased, causing the yield on 10-year notes to rise above 4% for the first time since November. The Dollar index also gained momentum, trading at 104.59.
Investors remain focused on the Federal Reserve's interest rate trajectory. On Wednesday, Fed officials made statements supporting the idea that the most effective way to combat inflation is through aggressive interest rate hikes.
Moreover, the PMI data suggests that inflationary pressures have resurfaced, indicating that the Fed should not hastily conclude its tightening policy cycle.
How Corporate Earnings Reports Affected the SPX?
In the stock market, Lowe's Companies saw a 6% drop in its share price after it reported fourth-quarter revenue that fell short of Wall Street's expectations. The company also provided annual sales guidance that did not meet the projected figures.
Tesla also garnered attention as it began its investor day, during which the EV maker was expected to present its Master Plan 3 and provide insights into its long-term development strategy.
Snowflake's share price fell 7.3% after the company announced its Q4 earnings of $0.14 per share, falling short of the projected $0.05 on revenue of $589 million compared to the anticipated $576.22 million.
On the other hand, Okta's share price rose 13.7% after the company reported its Q4 earnings per share of $0.30, surpassing the estimated $0.09, and revenue of $510 million compared to the projected $489.79 million.
S&P500 Intraday Technical Levels
Support Resistance
3978.24 4037.35
3944.16 4062.38
3919.13 4096.46
Pivot Point: 4003.27
S&P500 – Technical Outlook
Technically, the S&P 500 (SPX) is experiencing a bearish trend, having dropped to $3,950 after breaking an upward channel at $4,100. The SPX's current support level is $3,950, supported by a double-bottom pattern. If this support level is broken, the S&P 500 may continue to fall, possibly to $3,885. On the other hand, the S&P 500's resistance level is at $4,000 or $4,075.
Later today, market participants will pay attention to FOMC Member Waller's speech at 9:00 pm.