According to the University of Michigan (UoM), Consumer Sentiment Index dropped from 78.1 in June to 72.5 in July 2020 versus the market expectation of 73.0, indicating that US consumers had grown less hopeful about the recovery of the US economy.
Coming on the back of a record contraction in the US economy by 32.9%, the survey shows that the deterioration in US consumer confidence has continued into July.
Further details of the report indicate a decline in the Current Economic Conditions Index from 87.1 to 82.8, and a drop from 72.3 to 65.9 in the Consumer Expectations component of the index.
The survey’s outcome adds to the negative sentiment on the S&P 500 index, which had earlier been dampened by weak earnings data from Chevron. Additionally, the domestic coronavirus situation in the US continues to pressurize the S&P 500 index. Reuters has just reported the latest data from the Department of Health in Florida, which shows an increase in the number of new coronavirus cases by 9,007. The number of coronavirus-related deaths rose to 257, a daily record.
Technical Outlook for the S&P 500 Index
The S&P 500 The last three days show some exciting action on the S&P 500 daily chart. Price closed below the lower border of the rising wedge pattern but bounced from the 3228.4 support level the next day. Another attempt was made yesterday to breach this border, but the market recovered late to close with a pinbar above the 3228.4 support, but below the wedge’s lower edge. Today’s daily candle gapped upwards on market open but has been rejected at the wedge’s lower border once more, setting off a bearish move which is now challenging the 3228.4 support once more.
If this support area gives way as is expected of the resolution of the wedge, then we could see a march towards 3137.0, with 3070.8 and 3028.3 constituting the nearest support targets.
If the 3228.4 support level holds, we could see a bounce that retests the wedge’s border. If the bulls surmount challenge posed by that border, the price rise that follows could aim for the 3335.5 resistance target, which invalidates the pattern. 3256.1 remains a potential pitstop to this upside move.