S&P 500 Futures Resume Retreat As Coronavirus Starts to Hit Companies

S&P 500
S&P 500

The S&P 500 futures have resumed their decline on Thursday after several companies around the world continue to report dismal growth forecasts as the coronavirus outbreak starts to impact revenues.
The S&P 500 futures are down 2.3% on the day as travel and hospitality companies continue to bear the brunt of the continued spread of the coronavirus. Carnival extended the loss of 23% of its value in February with another 5% drop as news of the death of an elderly passenger on the Grand Princess cruise hit the newswires. The cruise ship remains held off the coast of San Francisco as the dangers of possible coronavirus outbreaks on high-passenger transport carriers becomes more evident.
Airline stocks were also hit on Thursday, as Delta Airlines, United Airlines and American Airlines all traded lower on the day. The bearish sentiment means that the S&P 500 index is set for a lower open in 30 minutes from now.

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Technical Outlook for S&P 500

The S&P 500 index looks set to give up much of the gains acquired after Joe Biden’s Super Tuesday wins in the US Democratic primaries. This indicates that the markets are still conscious of the more significant issue: the coronavirus is continuing to spread globally, and it is starting to affect the ability of companies to do business and make money.

The 4-hour chart shows that the upside move peaked at the 50% retracement from the swing high of 19 Feb to the swing low of 28 Feb. The downside looks set to resume following the breakdown of the ascending trendline that connects the intraday lows of the last two days. The same price move also breaches the 38.2% Fibonacci retracement to the downside. This leaves 3018.5 as the immediate downside target, with 2984.7 lying underneath (23.6% Fibonacci retracement). 

On the flip side, further upside in the short-term is only possible if price is able to overcome the resistance zone posed by the 3117.3 and 3129.6 (50% Fibo retracement levels). This move could then target the 3156 or 3194.4 (61.8% Fibo retracement) price levels if the break is successful. 

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