S&P 500 started firmly higher despite the historic high of jobless claims reported earlier. Jobless claims for the March 20 week came in at 3283K, well above the expectations of 1000K as the coronavirus outbreak forced companies to shut down and lay off employees across many sectors of the economy. The figure is worse than the 2008 financial crisis and is the first sign of the tremendous impact that the coronavirus will have in the U.S. economy. The $2 trillion coronavirus relief package calmed investors, who shift their attention to stocks looking for bargains as the valuations have dropped to 2016 levels.
In other macro data, the U.S. Gross Domestic Product came in at 2.1% in line with expectations for the fourth quarter. Core Personal Consumption Expenditures came in at 1.3% above the forecasts of 1.2% in the fourth quarter. The United States Goods Trade Balance rose from previous $-65.5B to $-59.89B in February.
S&P 500 index has lost over 20% in 2020, and the volatility index (VIX) is 7.97% lower today at 58.98. Entertainment and airlines stocks are the big gainers today. Carnival Corp. is 15.50% higher at 17.87, Boeing Co. is 14.82% at 182.03 and Delta Air Lines is 10.29% higher at 34.41.
Read our Best Trading Ideas for 2020.
S&P 500 Technical Analysis
S&P 500 adds 3.23% at 2,556 as the rebound from recent low continues. Investors are out for bottom fishing as the index exits oversold area. The technical outlook despite the recent bounce is bearish, and a correction lower can’t be ruled out.
Resistance will be met at 2,579 the daily high. The S&P 500 next level to watch is the 2,664 high from March 16. A credible break above might test the next resistance at 2,713 high from March 13.
On the flip side, the daily low at 2,409 will offer the first support for the index. A break below might attract more sellers for a move down to 2,390 the low from yesterday,s trading session. If bears pierce this level, then the way will be open for a move down to 2,178 the recent low from March 23th.