The S&P 500 futures extended losses on Tuesday after disappointing retail sales data from the US. According to data released by the US Census Bureau, US Retail Sales declined 0.5% in February, which was a contrast from the +0.2% consensus figure. It was also lower than the 0.6% upward revision for last month. Similarly, US Core Retail Sales fell 0.4% vs the +0.1% consensus and +0.6% figure posted in the previous month after upward revision.
The figures are a result of the shocks that retailers are facing due to supply disruptions from coronavirus-induced shutdowns. Shoppers may also be avoiding crowded places to minimize contact with people in an attempt to curtail exposure to potential transmission.
The disappointing data helped to push the S&P 500 futures 7.89% lower on the day to 2441.6, where it is now trading as at the time of writing.
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Technical Outlook for S&P 500
The S&P 500 ratings agency has indicated in its latest report that a global recession is in the offing. Economists at the S&P 500 suggest that global growth this year would face substantial downside risks and would likely drop to the 1.0 – 1.5% band.
The S&P 500 futures are now challenging one of the downside targets identified in a previous analysis piece at 2401.9, having bounced on that level several times on the day already. A breakdown of this area opens the door for the index to target the next support level at 2320.4 (17 April 2017 low). Below this area, 2273.2 and 2218.5 could become relevant if bearish pressure continues to exert on the index.
On the flip side, 2479.7 (28 August and 4 September 2017 weekly highs) could be a potential upside target of the 2401.9 support holds firm and supports a price bounce. 2550.7 may also retain some potential if price recovery on this bounce is strong.
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