It is yet another day of losses on the S&P 500 index, as the weekly jobless claims rose once more to 870K, as opposed to the previous reading (revised higher) of 866K. This figure was also higher than the market consensus of 845K.
The average figure for the previous 4-week period showed that claims fell by more than 35,000. Continuing jobless claims dropped by from 12.74 million (revised higher) to 12.58 million. However, economists are unanimous in declaring these levels as being too high in the face of a resumption of economic activity across the United States. The data indicate that the US Labor Market’s recovery remains slow, despite all the stimulus provided by the US Fed. Analysts at Wells Fargo say the recovery of the labour market is occurring “in fits”, and predict that the recovery trend could stall.
The continued delay in passing an additional stimulus package by the US Congress is also weighing on the market, even as the number of coronavirus cases in the US continues to rise. The S&P is down by 2.05% on the day and trades at 3251.1 currently.
Technical Outlook for S&P 500
The intraday lows of the S&P 500 are testing the 3282.2 support level. Even though the price bar has bounced off this level, the support remains under pressure as bearish fundamentals control market sentiment at the moment. A breakdown of this support allows sellers to drive towards 3137.0, with 3070.8 re-emerging as a potential support to the south.
On the flip side, follow-through buying on the bounce takes the index to the 3335.5 resistance level, but the 3393.5 and 3481.6 resistance levels may remain elusive if buying momentum dries out.
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S&P 500 Daily Chart
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