US stocks have opened in the red after a variety of economic data shook the markets this Thursday.
The coronavirus pandemic seems to have assumed alarming proportions in the UK and France as well as in the US, where data from CNN shows that nearly 36 states have seen dramatic increases in infection rates in the last few days. Northern Ireland has closed all schools in the strictest lockdown measures imposed in the UK, while a nighttime curfew has been put in place in France.
Apart from this, the jobless claims data released today by the Department of Labor proved concerning, as initial jobless claims rose from 845K (an upward revision from 840K) to 898K. The 4-week moving average also showed an increase of 8,000 from the previous week’s number. The initial jobless claims released today is the highest number seen in nearly two months and indicates that there has been virtually no improvement in the US jobs market of late.
On the stimulus front, there has not been much progress, and the recent interview by the Treasury Secretary on CNBC did not do much to convince
investors that things had moved significantly forward from where they were on Monday. As a result, the S&P 500 index is down by 1.03% and currently trades at 3453.3.
Technical Outlook for S&P 500
Today’s lower open has taken the price below the 3481.6 price level, with a chance for further downside towards 3393.5 or upside to test the 3481.6 resistance.
The present price picture is that of indecision. Attainment of 3528.9 has to follow a successful break of 3481.6. Momentum for this move could follow a bounce from the neckline of the reverse head and shoulders pattern.
On the other hand, a decline that breaks down the 3393.5 support opens the door for the price to attain 3335.5 or 3282.2, with 3228.4 lining up as a potential support to the downside.
S&P 500 Daily Chart